Category: Brewery

Boosting Brewery & Distillery Business with Entertainment and Lodging  

Cyndi
2 guitarists jumping

By: Alyssa L. Ochs

With thousands of craft breweries and distilleries in operation today, it’s no longer enough to simply produce amazing beers and spirits. Brewers and distillers are quickly learning that to thrive and stand out among the competition, they need to build a unique brand and expand their reach to a broader customer base.

  Some of the best ways to achieve this are to offer entertainment and recreation opportunities for everyone to enjoy and onsite lodging that makes an evening out safer and more convenient. With the right event-planning strategy, you can keep consumers coming back to your business even after they’ve sampled everything on the drink menu multiple times.

Types of Entertainment and Recreation

  In recent years, both breweries and distilleries have gotten very creative with the types of entertainment they offer. You’ll regularly find local establishments offering board game nights, yoga classes, musical concerts and karaoke nights. Trivia, open mic comedy nights, painting and crafting events and book club meetings are also held at breweries and distilleries.

  Low-key options, such as yard games and photo booths, are easy options to add, as well as professional networking events, poker tournaments and sport-themed events for big games. Breweries and distilleries can become more involved in their communities by partnering with other businesses to promote local products, nonprofits to support important causes and artists to display pieces of original artwork on the walls. Meanwhile, it’s fun to host holiday-themed festivals, offer educational brewing or distilling lessons and highlight new beverage releases in a way that entices people to walk through the door.

  Dana Koller, the president of Kaktus Brewing in Bernalillo, New Mexico, told Beverage Master Magazine that his brewery’s most successful events have been celebrating Oktoberfest, St. Patrick’s Day and other cultural events. Kaktus always has a full lineup of exciting events on the brewery calendar and offers small-batch brews, organic bites, and a refreshingly chill atmosphere.

  “I think what makes them successful is that we are genuine about the celebration and not just there to make a quick buck,” Koller said. “Although we may not be the most authentic option, we make sure that we have a blast doing what we do and show our appreciation for those wanting to celebrate.”

  On the distillery side of things, Sledge Distillery in Tolar, Texas, has been adding lots of events to its calendar lately, including tastings, tours, food, retail offerings and live music. Sledge Distillery specializes in hand-crafted spirits based on a World War II family moonshine recipe.

  “Private shopping nights for new releases have been very successful,” said Susan Sledge. “Also, we have found that the addition of live music adds to the atmosphere. Our clients are looking to re-engage with us and bring their friends along. We consider their repeat business a huge honor.”

Onsite Lodging Options

  Another unique idea for breweries and distilleries to consider is adding lodging near the taproom to welcome overnight guests. Some craft beverage producers have locations in historic buildings that can be renovated to include accommodation in an adjacent space.

  Alternatively, producers can purchase or build a separate building that provides lodging on the same property. Not only is this a good way to keep customers safe from drinking and driving, but it’s an opportunity to make your business a true weekend destination rather than just a quick stop along the way.

  One brewery that has added lodging to its offerings is Riff Raff Brewing Company in Pagosa Springs, Colorado. Founded in 2013, Riff Raff operates in a historic, Victorian-era house in the downtown area and offers flagship beers, seasonal taps and eclectic twists on favorite foods. Visitors can currently rent apartment units above the downtown brewpub through Airbnb.

  “The building that houses Riff Raff Brewing Company is registered on the Colorado State Historic Preservation roll and has been used and repurposed multiple times since it was built in 1898,” said Jason Cox, founder and CEO.

  “When we purchased the building and opened the brewery in 2013, the upstairs housed apartments with long-term rentals,” Cox said. “We underwent a major remodel in 2015 and converted to short-term rentals because of the fact that there was a brewery downstairs. We thought it would be a type of beer-and-breakfast kind of offering!”

What Consumers Want Right Now

  There is a high demand for entertainment options at breweries and distilleries because people are looking for fun ways to get out and experience their communities in different and social ways. Breweries and distilleries have emerged as ideal destinations for date nights, family-friendly fun and free things to do that don’t require a big commitment. Many businesses are finding success with inclusive events that are pet-friendly and welcome children. You can give consumers what they want by keeping participation costs low or free, offering something different from what they can find anywhere else in town, providing fun photo opportunities and maybe even selling specialized merchandise to mark the occasion.

  “I think what people are looking for is true community, a place and time to connect without expectations,” said Koller. “The music and events are the excuse to get out and socialize for them.”

  “Our customers are looking for a way to relax and take a break from the pressures of life,” said Sledge. “Our distillery is located in the country and gives our guests a feeling of truly ‘getting away.’” 

  “I can’t speak directly to data or analytics, but I do know there are several experiences where lodging is packaged with craft breweries, and it creates a more complete experience,” said Cox. “Our friends own a brewery in northern New Mexico that allows camping on the premises, and they have lots of concerts, so it provides an opportunity to have an immersive guest experience. We aim to do the same type of thing with our lodging above Riff Raff Brewing Company.”

Considerations for Breweries and Distilleries

  Planning events may seem overwhelming to some brewery and distillery owners because it’s just one more thing added to the to-do list and budget. It often pays off in terms of business sustainability and professional satisfaction in the long run. Events, recreation, entertainment and lodging provide fun opportunities in relaxed environments to build your brand and get people engaged with what you’re doing. It’s an effective way to make personal connections with your customers and perhaps even raise money for charitable causes.

  There are many things to think about when planning a new event, type of entertainment or onsite lodging. Cost tops the list since some things will inherently cost more than others. If the event requires renting or buying extra furniture, party supplies, or sound equipment, you’ll need to budget ahead. Although it may be an initial goal to make extra money from an event, it might be worth it to break even for the sake of outreach and exposure. Breweries and distilleries with large spaces may be able to rent out entire sections of the building or property for private events and make extra income in that way.

  Regarding onsite Airbnb offerings, Riff Raff’s Cox sees significant benefits in breweries entering the lodging business.

  “We rent more than 325 nights a year in each of the two rentals, which include a three-bedroom, two-bath unit and a one-bedroom, one-bath unit,” Cox said. “We do see people who book because it’s above a brewery, and they definitely want that experience. Sometimes I conduct VIP tours and add other offerings for guests who stay upstairs.”

Event Planning Tips

  When considering hosting an event, make sure to see what else is already scheduled in the community so that there are no conflicts that would prevent someone from attending what you have planned. In general, it’s best to keep the event size manageable so that the lines for beverages don’t get too long or the spaces too crowded. Fun themes will catch people’s attention, while free and low-cost ticket prices will make your events more accessible to everyone.

  Recurring events, such as activities that happen on the same day each week, make scheduling events easier and allow more people to participate when it works for their schedule. It may also be worth inviting another local brewery or distillery to co-host your event.

  Koller from Kaktus Brewing said that one of the most important things to plan for when hosting events is “making the numbers work so that you are not understaffed since this is always a major challenge.”

  “From the moment a guest arrives on property, we want them to feel welcome,” said Sledge. “Signage has been strategically placed, so people know where to go and the options they have for entertainment, food and beverages. Our employees are intentional about greeting guests and orienting them to the facility and events.”

What’s Next for Craft Beverage Entertainment?

  Producers are just getting started with what they have in mind to entice craft beverage enthusiasts.

  “For Kaktus Brewing, we have been working on plans to expand parking to host larger events with games, a new stage, more shade structures and outdoor cooking,” said Koller. “This will allow us to do full weekend events instead of just evening events.”

  “We are programming smaller, more intimate events where people share a particular interest,” said Sledge. “For example, we are doing a three-event women’s workshop called ‘Feel Good Fridays’ where the group has drinks with a licensed therapist who facilitates a group session on various topics.”

  Meanwhile, Cox recommended that any brewery looking to add short-term lodging should check with the local planning or zoning department to understand rules regulating short-term rentals.

  “Depending on the type of zoning district, it may or may not be allowable for a brewery to offer lodging,” Cox said. “After that, I would put myself in the shoes of a guest to understand the entire experience. For example, some of the equipment that a brewhouse uses runs 24/7, and the noise could have an impact on the lodging, depending on the configuration. Beyond that, I would say to create a great experience for the guests and make it happen. Remember, it’s all about the craft beer and having fun with it.”

Bottling & Canning Innovation

Cyndi

Companies Deliver Premium Technology, Raising the Stakes in Productivity!

bottling and canning process

By: Cheryl Gray

When it comes to bottling machinery for craft breweries and distilleries, technology is king.  The work that goes into fabricating, filling and sealing bottles and cans begins with the expertise of companies that understand what craft brewers and distillers need most—a cost-efficient way to boost output while also protecting the integrity of their products.  

  One of those companies is Pneumatic Scale Angelus, part of BW Packaging Systems. The Ohio-based firm is a global industry leader in designing and manufacturing beverage canning lines and filling technology for the craft beverage industry. The company’s numbers are impressive, starting with its years in business—more than 130. It has seven manufacturing locations and more than 700 members on its worldwide team. 

  Pneumatic Scale Angelus has installed more than 16,000 canning operations across 132 countries with applications that include liquid and dry filling, capping, can seaming and labeling. Global Marketing Director Gigi Lorence said that as an expert in beverage canning lines and filling technology, the company has built a reputation for knowing how to leverage the innovation of its high-speed beverage lines, scaling them down to the slower production speeds and lower volumes required for craft beverages. Lorence broke down the specifications for the company’s inline volumetric canning lines.

  “Our fully-integrated filler and seamer machines allow brewers to take control of their can filling operations. Running at speeds from 15 to 100 CPM, our inline canning machines are suited to small batch production and frequent changeover,” she said. “Our CB50F and CB100F open-air systems use our proprietary flowmeter technology to ensure a perfect fill at speeds to 100 CPM, with a gas flush system that keeps oxygen levels under control. The high-speed seamer design, scaled for single- or dual-head operation, delivers the only repeatable hermetic double seam in the industry. 

  “Our CB50C system leverages the CB50F design but uses counter-pressure filling technology to meet the demand for high-carbonation beverages, including hard seltzers, sparkling wines and high-carb beers. The CB50C uses true isobarometric filling technology, with the fill tank above the fill heads, allowing the product to be gravity-fed, as opposed to pumped upward. This minimizes product agitation for a quiet fill and lower CO2 loss.” 

  For brewers ready for the higher speeds of a rotary canning system, Lorence described PSA’s options for rotary volumetric canning lines. “These systems run from 100 CPM to up to 400 CPM, depending on configuration, which means brewers can expand their overall production without drastically increasing their overall footprint,” said Lorence. “Our larger CB244/324/404 rotary open-air systems serve brewers ready for higher speeds. These systems have 24, 32, or 40 electro-mechanically controlled filling heads that ensure fill level accuracy to within plus or minus 0.5 grams of the target volume and four seaming heads that offer the same industry-leading seal as our slower-speed machines.”

  There is a brand-new addition to PSA’s craft beverage canning lines. Lorence described the CB100C, launched this May at The Craft Brewers Conference in Minneapolis.

  “This rotary counter-pressure system builds upon the capabilities of the CB50C but leverages a 12-head rotary filling turret design, coupled with a dual-station seamer, to allow brewers to increase their throughput to more than 100 CPM. Using a motorized, recipe-driven turret design allows for automatic turret height adjustment,” she said. “Like the CB50C, the CB100C uses a true isobarometric filling, with an onboard product supply tank rated to 60 psi. The addition of the 12-head rotary filling turret enables the system to move more cans smoothly through the line, filling faster without creating an increase in product agitation as speeds increase. This gentle fill virtually eliminates the unwanted reductions in carbonation levels seen with other filling methods.

  “The CB100C also employs magnetic flowmeter technology to help you get a perfect fill with little waste and an under-cover gas flush system to keep dissolved oxygen levels low. In addition, our industry-leading Angelus double-seam technology keeps cans sealed tight, extending critical shelf life. The system is optimized for sleek and standard can bodies and designed with quick-change adjustments for easy changeovers accommodating various can heights and body diameters with no valve change required. A compact footprint and an intuitive HMI for individual fill-head volume adjustments simplify operation.”

  Another expert in bottling and canning operations for the craft beverage industry is XpressFill, a California-based company in operation since 2007. XpressFill offers a broad range of can and bottle filling systems for brewers and distillers, all of which promote ease of use, longevity and post-sale service as a top priority. It manufactures bottle fillers to accommodate volumetric, level fill and carbonated beverage technology, providing for nearly every bottling need. Rod Silver is head of the company’s marketing and sales.

  “XpressFill prides itself on its ability to respond to the needs of its customers. Our support of our products is unmatched,” said Silver. 

  XpressFill specifically targets smaller breweries that need guidance on the best equipment choices for their operations. “All XpressFill products are designed with the smaller, craft artisan in mind. We have been able to build affordable yet efficient and effective filling machines for this market,” Silver said. “The most popular filler for distillers is the XF460HP, specifically designed for spirits, using materials that are more resilient to ethanol. Our proprietary technology allows for filling well within TTB tolerances.” 

  Silver explained how the volumetric filler controls the amount of fill using a precision timer. The filler is calibrated to specifications and capable of accurate fills, regardless of inconsistencies in the bottle glass. The volumetric filler is also suitable for bottling various sizes, even down to 50 ml bottles.

Silver said XpressFill’s most popular products for craft brewers accommodate both cans and bottles. “The most popular fillers for brewers are the XF4500C (cans) and XF4500 (bottles). Both fillers use counter-pressure to minimize oxygen pick up during the fill.”

  Silver told Beverage Master Magazine that all XpressFill systems have a pre-fill CO2 purge cycle. The company’s counter-pressure systems require a minimal air compressor to operate the pneumatic actuators. Open can fillers have a moveable shelf that is easily adjustable for various sizes, with a maximum can diameter of four inches. 

  The counter pressure filler has a stopper that fits tightly into the can or bottle opening to seal and pressurize the container. Filling a container, Silver said, is an exact science. XpressFill’s level fillers control the rate of fill using a level sensor. As the liquid reaches the sensor, the filler automatically stops the fill. The liquid level is set by adjusting the height of the shelf, which can be adjusted to about one-sixteenth inch increments. The level filler can be used for all products, including wine and distilled spirits. Silver said that the level filler is perfect if the sightline in the bottleneck is a concern for shelf presentation due to glass variations.

  Although Colorado-based Ska Fabricating was born out of the need to address the brewing, packaging and distribution of Ska Brewing, its innovations have helped breweries worldwide.  

  Marketing Director Elise Mackay described the company’s most popular depalletizers. “Our most popular can depalletizer is the Can-i-Bus. It is our original depalletizer, obviously updated and

improved upon many times since its creation, and a full-height automatic depalletizer that is capable of speeds up to 250 CPM. It comes with three different trim levels that come with a variety of different features. It’s perfect for mid-sized operations and a great option to grow into for smaller operations,” said Mackay. “Our Nimbus is like our Can-i-Bus Jr. It features the same robust construction and pallet sweep mechanism that the Can-i-Bus does but uses a rotary table discharge that allows for additional accumulation with the added benefit of being able to fold down to save space when it isn’t in use. The Nimbus is also portable. You can use a pallet jack to move it from your production floor once you’re finished with your packaging day, so it’s perfect for smaller-scale operations looking to grow.” 

  Mackay said that innovation is always at the forefront at Ska Fabricating. “The newest addition, the Microbus, is our smallest footprint, most flexible, most affordable depalletizer yet. It’s rated up to 30 CPM and is an ideal product for operations that are just getting started in canning. Low speeds, manual pallet lifting, and ultimate portability make the Microbus special. It features the same foldable rotary table discharge that I mentioned with the Nimbus, but it also has a foldable dead plate, so when it’s completely dismantled, the footprint is minuscule.”  

  Mackay points out why her company is considered in the industry as, in her words, the “likable expert.”

  “We have an incredible team of engineers that create robust and reliable machines and then work with every single customer to create custom layouts to suit their exact needs; a personable and reliable sales team with tons of brewery and packaging experience; an installation crew that will travel to the ends of the earth to set our customers up for success; and a top-notch customer support team that is available 24/7 to assist with any issues that arise.”

  Industry experience, innovative products and after-sale customer service are common threads among these companies. These experts say that this combination is what breweries and distilleries should look for when choosing a company for bottling and canning products.

The Golden Beers of South Africa

Cyndi

By: Hanifa Sekandi

In North America, beer is a much-loved beverage. It is the go-to drink during cottage season. It is a trusted companion for every sports event. It is the bridge between strangers who will find themselves bonding over a pint. Everyone has their favorite brew. Brand loyalty is common and set at a high standard. Just take a stroll through a tailgate party, and you will see what beer drink-ers prefer. Imbibing beer is a culture that spans the globe. Each country has its unique approach to this nuanced fermented beverage. As we travel to South Africa, you will learn about its rich history of beer.

  In South Africa, the sun’s heat will graze your skin as the sound of life in this vibrant country will propel you to live boldly. Truly, those who have been to South Africa will tell you there is nothing like it. It is an experience that will change you in ways you could not imagine. South African people and the culture awaken the soul.

  As you raise your glass in the celebration, you cannot help but feel the rhythm of South African Zulu dancers. They harmonically chant songs about better days ahead, accompanied by the rhythmic-thunderous sound of the djembe drums. When we drink beer, we dance and sing. We gather with friends and family to tell stories; feel connected. Beer is the ultimate connector where alcoholic beverages are concerned. Even for those who do not prefer beer, a light lager is an exception. When you attend a gathering in South Africa, coolers will overflow, and beer runs throughout the party are continuous. Sounds a lot like North American beer culture, doesn’t it? So, what makes South Afri-can beer culture so unique? More importantly, how did beer become a star beverage in this Afri-can country?

Golden Brew Beginnings In South African

  Along with wine in South Africa, European immigrants – Dutch and British settlers – brought their beer-making knowledge to this country. One cannot solely attribute their arrival for the presence of alcohol, since traditionally made alcoholic beverages existed before. However, their presence ushered in the beer industry and set forth a new enterprise that has thrived for more than 300 years.

  The beginnings of the European golden brew in South Africa first began in the mid-1650s with the Dutch. An excerpt from Jan van Riebeeck’s diary noted that the first bottled beer was brewed on October 4, 1658. Similar to wine and other spirits, beer was used for its medicinal properties. Since beer was initially brewed to treat scurvy, the Nieuwe Haarlem shipwreck that landed Dutch sailors on South African soil may have been a saving grace for the scurvy-ridden explor-ers.

  The idea that beer is deemed a beneficial natural beverage in some countries still exists. Of course, with modern beer-making and innovative methods, the composition of beer has changed, particularly when one looks at commercially sold beer brands. Concerning local homebrews, this belief is still firmly held. As with spirits, the purpose evolved as the desire for beer and its use changed. When European settlers first arrived on South African shores, it was essential to elimi-nate the plague impacting trade between the East Indies and the Netherlands. One could say that the recreational consumption of alcoholic beverages is a haphazard event. The original intent was not to intoxicate people or add more fun to the party.

  Malan Liquor Commission in 1960 noted its concern about the intoxicating effects of beer and liquor. This assessment concluded that alcoholic beverages should be consumed with care and with food. As a result, an initiative was created to stabilize drinking habits. It also demonstrated how what was once an essential remedial beverage had transitioned into a leisure one. At the time, beer still held a high standard where natural beverages were concerned. Unlike spirits, it was dubbed a drink consumed by moderate drinkers.

  A seed must be planted to see growth, quite evident today in the rapidly expanding beer industry in South Africa. The burgeoning beer industry was not foreseen at its inception or use in the mid-17th century. One would not know its initial purpose unless they did a deep dive into its begin-ning.

  South Africa now takes up significant space on the world stage with approximately 34% beer consumption, a number expected to grow roughly 10% annually. South African Breweries (SAB), established in 1895, holds a monopoly on beer production and distribution in South Africa. It is the largest brewer and is a subsidiary of AB InBev, with seven breweries operated under its helm. It maintains an impressive annual brewing capacity of 3.1 billion liters. Familiar premium beer brands Hansa Pilsener and Carling Black Labels are among their diverse portfolio of beers.

Competing with Local Brews

  As the beer industry expands globally, it may appear that local or homebrews are popping up out of nowhere. The truth is, local brews and brews endemic to the land have always been there. For example, Bantu Beer, an essential part of the Bantu tribe’s life, is a traditionally brewed beer. The Bantu create this beer with water and kaffircorn. The consistency of this brew is quite thick – almost smoothie-like – since it is partially strained. It is considered a food and drink for this tribe. What differs from European beer is the fermentation process. Bantu beer is fermented until it begins to sour. European beer is pasteurized after bottling. The longer fermentation process that Bantu beer undergoes creates a higher alcohol content.

  The legalization of Bantu beer for sale in 1962 could be attributed to its mainstream prevalence. People are looking for something that cuts through the norm. Bantu beer, along with other homebrews, satisfies this desire. It also encourages new brands to enter the market and perhaps borrow from traditionally made brews to expand the South African beer market with something somewhat familiar. When looking at the South African beer market, Bantu Beer is a nouveau niche beverage for those unfamiliar with South African culture or traditional drinks. Its con-sistency also sets it apart from the silkier texture of most beers.

  Industrially-made Bantu Beer changed in composition. Now, the mash consists of maize grits combined with kaffircorn malt. These changes are spurring more innovations to expand Bantu’s profit potential. Breweries are looking to entice niche beer consumers who want to drink premi-um, naturally brewed beers or beers that support their lifestyle. Microbreweries trying to break through the market may take the lead and tap into local blends.

Sharing Traditions

  The changing political and economic landscape in South Africa is a nation of people who en-dured the cruelties of apartheid. For this country, it is time to rebuild and restore. Imagine being born in a country where you have no rights? A land where your ancestors lived freely for thou-sands of years and have no right to live off the land? Or make profits from your labor? South Africans are claiming not just their land but their birthright to live freely, feed their families and create a life for themselves.

  This shift also extends to the beer industry. Local brews are owned and made by South Africans. Breweries owned by the Xhosa, Sotho and Zulu tribes are making beers used for cultural practic-es. For example, The Xhosa beer is shared as a beverage of reciprocity during the harvesting of crops, a time that requires neighboring farmers to come together for additional labor. Beer is of-fered as a way to show appreciation.

  Sorghum, gluten-free beers made by modern breweries are most likely borrowed from these tribes. The traditional beer, Umqombothi, is made using sorghum malt, maize malt, corn maize, water and yeast. Another noteworthy find highlights that gluten-free, digestive-friendly beers are not an innovation. As the South African beer industry continues to soar, Umqombothi will be-come the brew watch since it meets the desires not just of the local consumer but tourists who prefer locally made beers low in alcohol and gut-friendly. A beer with a smooth texture and slightly sour aftertaste refreshes the tastebuds. A great sipping beer enjoyed without the over-whelming intoxicating effects experienced with other beers. The art of making this traditional beer passes through generations. It is also brewed in South African homes with unique spices, herbs or citrus additions to create new flavors.

  If you ever find yourself in this beautiful country, tasting local beers is a worthwhile experience. Travel back in time with each sip and feel the warmth of the South African people.

How Beer Wholesalers Can Use The Ansoff Matrix to Grow Sales

Cyndi

The Ansoff Matrix is a tool that can help you build a sales growth strategy and identify opportunities to increase revenue.

The matrix was originally developed as a device for businesses to think about revenue diversification.

Since then, it has been used as a quick and easy way to build a sales strategy while considering the risks of growth.

The matrix breaks down the drivers of sales growth into these categories:

  1. New markets (accounts)
  2. Existing markets (accounts)
  3. New products
  4. Existing products

The matrix then combines these four categories and assigns a relative amount of risk to each approach.

The Ansoff's Matrix

For example, building a sales strategy to focus on improving market penetration with existing customers and products is low risk.

Whereas, diversifying into new products in a new market comes with a higher risk.

How can you use the Ansoff Matrix to Grow Beer Sales?

Use it to ask strategic questions:

  • How can we sell more of our current products to our existing customer base?
    • Could we do better with e-commerce options? Can we improve our marketing (social media, traditional media, events, etc.)?
  • How could we enter new markets with current products (or add new accounts)?
    • Are there opportunities to acquire brand/territory rights or purchase another distribution business?
  • How could we develop existing products or services?
    • In other words, could we market the products differently, could we provide more sales training, could we hire a specialized sales person?
  • How could we move into new markets with new products (or services)?
    • For example, could you sell non-alcohol products to non-licensed accounts (a new market)?

The Ansoff Matrix is a simple and easy way to think about sales growth strategy and find new ways to increase revenue.

Use the matrix to brainstorm ideas and ask difficult (but profitable) questions.

Yours in Sales Growth,

Kary

P.S. Take advantage of the Spring Special and save 33% off the Beer Business Finance Subscription. Use Discount Code SPRINGCLEAN at checkout.

Your subscription includes access to the library of online courses, back issues of the Beer Wholesaler Financial Newsletter, webinars, podcasts, tools and resources to help you drive sales and profits in your beer business.

3 Spring Cleaning Tips to Make Your Wholesaler Finances Sparkle

Cyndi

Spring is the perfect time to clean up your wholesaler finances and make ready for the summer selling season.

In this post, we’ll share 3 Spring Cleaning Tips to Make your Finances Sparkle:

  1. Organize your corporate documents: Use the checklist to scrub your important papers
  2. Count your inventory: Borrow the process to keep your inventory records nice and tidy
  3. Review the balance sheet: Download the White Paper and learn how to keep your financial statements squeaky clean

Spring Clean Tip #1: Organize Wholesaler Corporate Docs

If you’re like most wholesalers, you have corporate records stashed everywhere. Some are tacked to the wall, others are in your desk drawer or saved on your laptop.

Corporate records are important because they show that you have the proper licenses, filings and legal standing to operate your wholesaler business.

Corporate records are critical to maintain your ‘corporate’ status and the liability protections this provides.

Examples of corporate records include:

  • Articles of Incorporation
  • Bylaws
  • Stock certificates
  • Stock ledger recording each stock issuance or transfer
  • Minutes of meetings of the directors
  • Corporate seal

If you don’t have the time or patience to locate and organize your corporate records consider hiring an attorney to do it for you. They won’t be cheap, but they will make sure all the necessary docs exist and are properly filled out.

Corporate docs are super important to preserve the ‘corporate veil’ and protect you from liability.

If you plan on borrowing money, banks need to see this information. If you plan on bringing on an investor, or eventually selling, investors / buyers will insist on complete and accurate corporate docs.

If you want to do it yourself, use the Corporate Docs Checklist as a guide to get started. Spring is a great time to locate, organize and clean up those corporate documents.

Spring Clean Tip #2: Count your Inventory

Counting inventory can be difficult, time-consuming and un-productive. But these things only happen when you do it the wrong way.

Use this Inventory Counting Checklist to count the right way.

You’ll find it takes less time and will get you the results you want: accurate inventory on the books. Everyone wins.

Spring is a great time to clean up your inventory. Use the process, and make it count.

Spring Clean Tip #3: Reconcile the Balance Sheet

Your balance sheet reports on your assets, liabilities and equity. It shows what you own, what you owe, and the net worth of your business.

Unfortunately, the balance sheet is often filled with financial mistakes.

Assets may be listed on the balance sheet that don’t exist any longer. Lost kegs anyone? How about that old inventory you haven’t written off yet?

Prepaid expense is another hiding spot for balance sheet errors. Items get booked here and never removed. Prepaid hops or prepaid insurance are common items that get stuck in here.

Need some guidance on how to get started with the balance sheet clean-up? Check out this post and podcast: How to Fix These Common Wholesaler Financial Problems​

Wrap Up + Action Items

Spring is the perfect time for a financial clean-up. Start with a purge of your old financial records. Throwing things away feels good.

Use the document retention guide to identify what can be tossed out. Hire a shredding company to do the dirty work.

Next, do a full physical count of your inventory. You wouldn’t dream of delivering inaccurate customer orders, don’t operate your business with incorrect inventory records.

Finish the spring clean-up with a review of your balance sheet. Lots of financial mistakes get stuck here and need to be scrubbed clean.

Warm weather, sunshine, and increased sales are on the way. Now is the perfect time to make ready with a financial spring clean-up.

Yours in Financial Spring Cleaning,

Kary

P.S. Take advantage of the Spring Special and save 33% off the Beer Business Finance Subscription. Use Discount Code SPRINGCLEAN at checkout.

Your subscription includes access to the library of online courses, back issues of the Beer Wholesaler Financial Newsletter, webinars, podcasts, tools and resources to help you drive sales and profits in your beer business.

Low-Alcohol Beer: How to Answer This Global Trend?

Cyndi
fermentis banner

The global beer market, both in volume and value, has seen great expansion for many years. This growth in demand has seen both a rise in the number of breweries and an expansion in beer style diversity. Among these styles, one of them is emerging significantly around the world: no and low-alcohol beers (NAB-LAB).

A bigger market provides a larger consumer panel with different expectations and desires. Low-alcohol beers emerged to meet a need which only existed moderately in the past. Indeed, an entire segment of consumers has grown with an education around well-being, the “well-eating” and now the “well-drinking”. Modern beer drinkers pay special attention to the product’s caloric intake, have an increased knowledge about a product’s health benefits and the desire to consume locally if possible. While the third point is not always substantiated, low Alcohol answers the two first consumption trends: in a consumer mindset, less alcohol implies less sugar and a better health benefit, and generally alcohol always has a negative connotation. All other factors being equal, especially taste and price, there is no doubt that for this kind of consumer low-alcohol beer is a viable alternative to “classic beer”. Generally, we can bring this low-alcohol trend closer to the “free” trends, such as additive-free, gluten-free and alcohol-free.

To these new consumers, we must add those who’ve always had this “need” for a low-alcoholic beer. For health reasons, like pregnant women for example or for a religious conviction. Although this need always existed, it has strengthened during the last few years, due to the fact that beer is now a societal phenomenon. Consumers, by wiling to be part of the society, wants to consume trendy product. Therefore, the product must adapt itself to the consumer and give him this possibility. This is the reason behind the rise of low-alcohol beers.

Although demand is quite recent, we must go back much further to find the origin of low-alcohol beers. It’s the year 1920, in the USA and it’s the Prohibition: this constitution signs the interdiction to produce, transport, import and sell alcohol in order to reduce criminality and corruption in the country. Taking place from 1919 to 1933, this law pushes breweries to reinvent themselves to survive. Low-alcoholic beers were born!

Although the style emerged under constraint, nowadays it’s really the brewer’s choice to produce no or low-alcoholic beers to answer the growing demand. When going for this particular style, the question of the process arises: how does a brewer significantly reduce alcohol quantity without changing production process? Because Yeast is the key for alcohol production, it was our duty to help brewers in this task. We, at Fermentis, have been solicited to develop a solution.

Firstly, we had to do the work of screening among all the strains we know, a long-term task to select the ones that could match our research criterion: technical criteria but also sensorial criteria to answer to brewers need. Simon Jeanpierre, Technical Sales Support Manager Asia Pacific, tells us more about it: “To perform our first screening, our target was to list Saccharomyces and non-Saccharomyces strains able to produce only little alcohol. To narrow this list, we looked at microorganisms also able to reproduce as much as possible the expected beer flavours, as we traditionally know. This naturally led us to maltose-negative strain unable to ferment complex sugars (i.e. polymers of glucose), with yet a strong ability to produce higher alcohols, Esters and phenols, participating into the beer aromas.”

To understand our decision to steer our choice towards maltose-negative strains, you just have to look at the classical composition of a beer wort on the schema here below. Unlike the other strains of Fermentis range, maltose-negative strains only have the capacity to ferment glucose (DP1, single sugar chains), the equivalent of 10 to 15% of total sugars in wort.  Less fermentable sugars imply a lower alcohol production in the final beer.

low alcohol yeast selection

This done, the next step was to verify our hypothesis with a trial protocol, it’s Simon who explains it: “We started with the beginning: a recipe. This recipe had to produce a classic wort at a standard density of 15, 10, 8 and 6°P (1061, 1040, 1032 and 1024 in specific density) fermented at 20°C (68°F). It was then fermented with all screened strains and accurately followed-up on sugar consumption and alcohol production. A tasting with a panel of experts finally allowed us to choose the winning strain that would not only perform well in low alcohol production but also provide essential aromas expected in the beer during a proper fermentation.”  Moreover, this yeast produces “clean beers” without off-flavours that are commonly found in NAB.

The strain we have selected after duplicating this trial protocol many times is a Saccharomyces chevalieri that we named SafBrew™ LA-01, LA simply for Low Alcohol.  We chose this strain because it showed excellent results during our fermentation trials as demonstrated hereunder. For every tested density, the fermentation reached its plateau after 60hrs for an alcohol level between 0,4 and 1,2% ABV, corresponding to an apparent degree of fermentation about 14%. We have noted a positive correlation between final degree of alcohol and wort initial density, so we are able to say that an initial density of 7°P (1028 in specific density) is ideal to reach 0,5% ABV which is the maximum alcohol level tolerated in many countries to write “No-alcoholic beer” on the label.

SafBrew LA-01 Fermentation trial

As previously presented, this strain is maltose-negative, it only consumes simple sugars (glucose, fructose, sucrose) leaving behind the maltose and other complex sugars such as maltotriose and dextrins. Logically, we find more residual sugars in our low-alcoholic beer. The below graph confirms that in numbers, DP2 means disaccharides which are mainly maltose and DP3 means trisaccharides which are mainly maltotriose.

SafBrew LA-01 sugar consumption

We have seen that in purely scientific terms, SafBrew™ LA-01 allows us to brew a NAB-LAB, but what about the sensory profile of the beer itself? This is a legitimate question because such a high level of residual maltose doesn’t exist in “classic” beers. Maltose is a sugar able to bring a clean sweetness. In the majority of beers, it doesn’t have the chance to express its potential because it’s turned into alcohol and CO2 by yeasts. Therefore, it’s the alcohol which will mainly bring the roundness and sweetness perception in the mouth (or to Mouthfeel). In a NAB-LAB, residual maltose can play this role because alcohol is present in small quantity only. However, if sweetness level in your final beer worries you, it’s easy to balance it with several brewing tools as Simon explains to us: “Bitterness level plays a great role and anything above 15 IBU for 0.5% ABV is a good target to balance the sweetness level. Increasing your water hardness gives a firmer bitterness too. On the cereal side, limit the use of caramel malts and the sweet flavour associated with them. To finish balancing the bill, there is of course the acidity. You can either pre-acidify your wort prior to fermentation or use greater carbonation and its associated carbonic acid which also propels aroma.”

Another important thing when we are talking about sensory profile is the fact that SafBrew™ LA-01 is a POF + strain. By being classified positive (+), SafBrew™ LA-01 owns a gene which expresses the POF character, POF meaning phenolic off flavour. In other words, this yeast has a specific enzyme that decarboxylates phenolic acids, like ferulic acid and coumaric acid, present in wort and thus producing respectively the flavour-active compounds 4VG and 4VP. These compounds contribute to spicy, clove-like flavours which, depending on the concentration, may produce a spicy and complex character. Note that in a NAB-LABs brewed with SafBrew™ LA-01, this phenolic side will be very light as described by Simon: “From a sensory perspective we really enjoyed the slight phenolic expression it develops. Keep in mind that the expression of a POF character depends on the amount of ferulic acid you have in your malt. In a NAB-LAB, you will therefore only have a limited expression from the recommended lower amount of malt”.

Last but not the least, the pasteurization topic. Pasteurization is a technique invented in 1865 by Louis Pasteur for food conservation by killing all living microorganisms in the product. The process is theoretically quite simple: you heat the product between 62°C to 88°C (144 to 191°F) before brutally cooling it. Pasteurization is not popular in the craft beer industry because it’s linked to standardization of the product or because, with this process, the beer is not really “alive” anymore and will not evolve over time.

But in regard to our recommendation for NAB-LAB, pasteurization is mandatory. You are certainly aware of how much yeasts and microorganisms like sugars and how much residual sugars we still have in a NAB-LAB at the end of fermentation. If a pasteurization is not done, any living microorganisms could eventually ferment maltose and totally alter the beer or even create overcarbonation in bottles, which could be dangerous. Different Pasteurization techniques exist such as tunnel pasteurization, whichever technique is chosen, Simon explains how much you have to pasteurize: “As soon as you have reached your max ADF of 13-15%, it will be important to inhibit eventual living friends from further fermenting. We studied different cross-contamination levels with Saccharomyces cerevisiae and observed a minimum safe limit of 80 PU in order to prevent growth in a brew fermented with SafBrew™ LA-01. We recommend the range of 80-120 PU.” PU signifies Pasteur Units, in terms of affect, one PU is equivalent to heating to 60°C in one minute. To calculate your pasteurization level, the formula is the following:

PU= t x 1,393 (T-60)

Where t is the time you heat in minutes and T is the temperature in °C.

A true alternative to pasteurization doesn’t really exist, it remains the best technique for ensuring optimal microbiology of a beer. We know that this technique is not accessible to every brewer and as Simon explains, we are constantly looking for solutions for small breweries: “Fermentis is aware that such equipment can be limited to big scale breweries. This is why we are working on alternatives to offer craft brewers the best performance in fermenting flavourful NAB-LAB with our SafBrew™ LA-01. Such alternatives exist through intrusive (biotechnology) or non-intrusive methods (cool chain). Feel free to reach out to us to learn more and receive tailor-made advice on your NAB-LAB fermentation management and hygiene practices.”

Simon Jeanpierre, Hugo Picard

A Legal Checklist for the Startup Brewery

Cyndi
gavel at the top of clipboards

By: Brian D. Kaider, Esq.

For those hoping to realize their dream of starting a craft brewery, the number of tasks can be overwhelming and it may be difficult to know where to begin.  Building the right team to help achieve each objective can smooth the path considerably.  One of the first members of that team should be an attorney knowledgeable in the industry.  The information below is not a comprehensive list of everything a brewery needs to do, but is intended to provide a rough estimation of the time and expense required for the major events that may require an attorney, as well as identifying opportunities to save expense by doing some tasks in-house.  These items are listed in a sequential order that may be useful, but is certainly not a requirement. 

Form Corporate Entity

  In most cases, a limited liability company (LLC) is the best structure for a startup brewery, though it is wise to first consult a CPA or tax professional familiar with breweries.  Secretary of State offices often have simple online forms for the Articles of Organization of an LLC that do not require the services of an attorney.  However, some States, such as California, New York, and Delaware, require an LLC to have a signed operating agreement.  As explained below, the operating agreement should be drafted by an attorney and in some cases the attorney may offer a package that includes creation of the operating agreement along with creating and filing the articles of organization.  Though it varies state-to-state, the filing fees for Articles of Organization are typically $100-200 and it generally takes 2-3 weeks for the application to be accepted by the state, though it can sometimes be expedited for an additional fee.

Once the corporate entity is formed, the business can apply for an Employer Identification Number (EIN) using the free online form on the IRS website.  The EIN is needed to then open a bank account in the name of the business. 

Trademarks

  There are two reasons why filing for federal trademark registration should be the next step.  First, prior to the COVID pandemic, it generally took at least eight months to secure trademark registration.  Post-COVID, it is now taking closer to one year, at a minimum.  Second, if there is going to be a problem getting the mark registered or a competitor in the market is going to oppose the application or use of the mark, it is better to find out as soon as possible and preferably before spending money on developing a brand image, signage, and customer recognition of the name.

  Many breweries attempt to register their trademarks themselves and sometimes they are successful.  But, even registration of the mark does not ensure freedom-to-operate using the name.  Competitors may attempt to cancel the mark post-registration or may have developed common law trademark rights based on prior usage of the name even though it was never federally registered.  A skilled trademark attorney will conduct a thorough “clearance search” before filing an application to uncover potential obstacles to registration or problematic common law usage.

In addition, there are many technical requirements governing how applications for trademark registration must be filed.  It is common for trademark applications filed without an attorney to be rejected based on a technical flaw and then abandoned because the applicant did not know how to fix the problem.

  The costs to obtain federal trademark registration can vary significantly.  In most cases, the application can be filed online using pre-existing descriptions of the associated goods and services.  The filing fees for such applications are $250 per class of goods and services (i.e., international class 032 for beer, class 043 for taproom services, etc.).  Additional government fees will depend on whether the application is filed as “actual use” versus “intent-to-use,” whether extensions of time are requested before filing a Statement of Use, etc.  Also, attorneys’ fees for conducting a clearance search, filing and prosecuting the application can vary dramatically.  As a very general guide, one should anticipate about $2,000 total cost per trademark, but discuss each mark with an attorney for a specific estimate.

Operating Agreement

  All LLC’s should have a written operating agreement.  For single-member LLCs, they help to distinguish the business financial interests from the owner’s personal financial interests.  For multi-member LLC’s they are critical; they are essentially a “pre-nup” for the business owners. 

  There are three reasons why breweries should hire an attorney to draft an operating agreement from scratch.  First, online or “standard” operating agreements are generally drafted very poorly.  Second, states vary in terms of what is required to be included in an operating agreement, so using one from the internet may not satisfy the law in a particular state.  Third, and most important, drafting and negotiating an operating agreement forces the owners to discuss issues that might otherwise be left unaddressed.  The resulting document is tailored to the owners’ specific needs and can prevent unnecessary expense, disagreement, and hardship if problems develop in the business relationship down the line.

  The legal fees for drafting the operating agreement will depend on the number of members and the level of agreement between the members on important issues.  Five to ten hours of attorney time is a good starting estimate.

Financing

  Given the expense, very few breweries are built purely from the owners’ savings.  Whether the project will be funded by friends and family, through loans, through investors, or some combination thereof, having a knowledgeable CPA involved is essential.  In addition, if funds will be raised from investors, an attorney should be part of the team, to ensure that the owners do not run afoul of securities laws.

Lease

  Most breweries are built on leased property.  Often a commercial landlord will have a “standard” lease that they want the brewery to sign.  But, unless a landlord has already had a brewery tenant, they are likely unfamiliar with the particular needs of a brewery and their standard lease will reflect this lack of understanding.  Having an attorney that not only understands commercial leases, but is familiar with brewing equipment and operations, can prevent the costly mistake of signing a long-term lease for a property that will not meet the brewery’s needs.  Some of the issues that should be addressed include water and electrical supply, puncturing walls and ceilings for ventilation, sloped floors and trench drains, noise levels, odors, use of outdoor space, etc.  It is impossible to estimate the cost of an attorney’s involvement in this process as every lease and situation is different.  But, getting the attorney involved in the beginning is the most cost effective option as it is easier to prevent a disagreement than to resolve one.

Equipment Purchasing

  Breweries have a lot to buy:  a brew house and fermenters, furniture, glassware, grain and hops, and much more.  Generally, owners make these purchases on their own, but for large expenses or long-term supply agreements, it’s never a bad idea to have an attorney review the terms.

File Brewer’s Notice with TTB

  Some breweries have their attorney prepare and file the Brewers Notice and accompanying documentation with the TTB and certainly that can take some weight off the owners’ to-do list and ensure things get filed correctly the first time.  But, for those looking to save on legal fees, this is one area that it makes sense to DIY.  The forms are long and detailed, but they are not especially difficult.  The TTB has excellent online resources and guidance and the personnel at the TTB are quite friendly and helpful on the phone. 

  As a rough guide, it will take about 1-2 weeks to learn what information the TTB needs, gather the materials, and fill out the forms.  As of January 2022, the average processing time for a new application at the TTB was 34 days. 

  For those that do have their attorneys prepare the application, a rough estimation would be two to five hours of attorney time.  The more complete the information provided to the attorney the first time, the lower the cost.

File for State Manufacturing License

  As with the TTB application, the application for a manufacturing license from the state, and any necessary local licenses or permits, are something that can be done by the brewery owners to save legal fees.  Though it varies state-to-state, the online resources tend not to be as complete or user friendly as those of the TTB and the response to telephone inquiries can be… inconsistent.  However, with a bit of patience the forms are not terribly onerous.  Being on good terms with other breweries in the area can be valuable, too, as they may be willing to help with any questions about the local forms. 

Distributor Agreement

  Most breweries start with taproom sales and some keg sales to nearby bars and restaurants, especially if they can self-distribute, but growth eventually leads to the need for a distributor.  Breweries should never sign a distribution agreement without it being reviewed by an attorney.  State laws on the subject are heavily slanted in favor of distributors and the contracts can be nearly impossible to terminate even if the distributor is failing to meet its obligations.  A knowledgeable attorney can help to level the playing field as much as possible, particularly though negotiation of what constitutes “good cause” for termination and how to calculate the fair market value of the distribution rights.  The legal fees will depend on the circumstances, but this is one area where breweries should not try to cut costs.

Conclusion

  Successful entrepreneurs do not try to do everything alone. They surround themselves with experts to help navigate difficult issues.  Bringing an experienced attorney onto the team at the beginning of the process of starting a brewery can save time and money by preventing costly mistakes. 

  Brian Kaider is a principal of KaiderLaw, 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.

Future of the Liquor & Spirit Industry: Based on the Integration of the Metaverse

Cyndi
corporate person typing

By: Rohan Doodnauth, Co-founder — OpaLink

In late October of 2021, Mark Zuckerberg announced his company’s intention to rebrand from Facebook to Meta and build an immersive platform fueled by augmented and virtual reality (AR/VR). This platform — the Metaverse — will further blur the boundaries between our online digital lives and our more tangible, physical ones. In his 2021 Founder’s Letter, Zuckerberg remarked how the Metaverse “will touch every product we build,” and will allow users to socialize, attend events, create, work, shop, and more in ways that transcend how we think about the internet and digital technology.

  If the past few years have shown the liquor industry anything, it’s that staying on top of emerging technologies and shifts in consumer trends is vital to the success of our brands and businesses. Look at the growth of omnichannel marketing and sales, for example. Between December of 2019 and November of 2020, retail wine sales at multi-outlet stores in the US grew by some 11.4%. For some businesses in the industry, this operational pivot spelled the difference between surviving or closing during the initial stages of the pandemic.

  With these notions in mind, it’s difficult for us not to consider how the Metaverse could impact the liquor industry as a whole. According to Zuckerberg, the Metaverse aims to become a new central hub of e-commerce and consumer activities. As such, brands in the liquor industry will be forced to rethink how its integration into their operations, marketing, and sales will reshape the future of their business, those of their competitors, and even their consumer markets. Furthermore, brands and businesses must possess the capability to remain agile as they integrate more deeply within the Metaverse, and take notice of how this integration might spur shifts throughout the liquor industry.

Unique VR Dining Experiences

  Within the Metaverse, customers won’t be confined by geographical distance or other physical limitations in exploring the dining or drink options available to them. Rather, upon entering the Metaverse, they will have the availability and opportunity to talk with chefs, foodies, and beverage makers all around the world in the palms of their hands. This will inevitably create a deeper integration of and connection to other cultures, as customers will be able to connect and chat with anyone anywhere in the world at practically any time, and open the door for businesses to provide them with truly unique dining experiences.

  For instance, imagine logging into the Metaverse and browsing a list of restaurants you wouldn’t normally be available to visit in person. Upon selecting a restaurant, you and your party can enter that restaurant’s virtual space within the Metaverse and begin browsing menus for the dishes or drinks you’d like to have. Once your orders are selected and placed, the restaurant’s e-commerce sales system will automatically register the items ordered and be able to virtually send them to you and the others in your party, even without any of you being physically present. Additionally, this method of sales could be utilized for those guests who may not want to show up in person, but still want to try food or drinks they otherwise wouldn’t be able to.

  This blend of convenience and experience, fueled by the AR/VR technology the Metaverse is founded upon, will grant brands the ability to offer customers a truly personalized, customizable experience. Through integrating their sales platforms into the Metaverse, businesses can not only reach a far larger range of customers directly, but also indirectly by allowing their customers to send meals and drinks to family or friends who cannot be physically present with them.

  Because such integration of businesses’ operations with the Metaverse will allow them to provide each individual customer with a one-of-a-kind dining experience, this will inherently create greater competition between brands. Much like we saw with the rise of omnichannel sales during the pandemic, those brands and businesses which are able to capitalize on such value earlier on will be far better positioned to outperform their competitors. Likewise, as the technological capabilities of the Metaverse continue to evolve, the businesses that are better able to remain agile to those evolutions and pivots will likely be the ones who see the most success from their integration with the Metaverse.

Adapting to a Hybrid World Amidst Growing Competition

  Whenever a new technology or trend emerges that impacts our business, it brings with it new sources of competition. This is simply the nature of business. Liquor and beverage industry brands seeking to integrate with the Metaverse will need to take note of how this hybrid digital space could affect their initiatives and create new competitive advantages both for them and their competitors.

  For example, dining experiences in the Metaverse will likely become a blend of futuristic physical features of restaurants and high-tech interactive technology. Knowing this, one method businesses could use to stand out from the competition is by making customers part of this immersive and interactive dining experience. Perhaps a craft brewery or small distillery might offer customers a VR-led tour of their facilities to learn more about their business, its history, and its available products. Maybe a gastropub offers new customers a coupon for a certain percentage off of their first purchase in the Metaverse, or offer them a redeemable code that customers can use to virtually send food or drinks to others. Because our appearance in the Metaverse will be one not of our physical selves, but instead a VR-generated avatar, another possibility might be for businesses like these to offer a free side dish or drink to customers whose avatars are sporting their brand’s logo on a piece of their avatar’s clothing. These are just a handful of examples of how businesses in the liquor and beverage industry could remain agile in adapting to growing and emerging consumer trends after integrating with the Metaverse.

  As a virtual universe that is speculated to become a converging point of consumer activity and e-commerce, it can be assumed that the AR/VR technology used to explore and interact with others will inevitably expand the possibilities businesses have to innovate. Although there is still much we don’t know about the Metaverse — and likely won’t know about for the better part of a decade, at least — this should not stop businesses from forming strategies to implement once they are more deeply integrated into the Metaverse itself.

Implementing a Metaverse Strategy

  Consider for a moment the ways in which the emergence and subsequent growth of social media platforms have impacted business over the last decade. If your own business was in operations prior to the rise of Facebook, Instagram, TikTok, or other social media platforms, it’s safe to assume that the way your business functioned then is vastly different compared to its current strategies and initiatives. When thinking about how your business can integrate successfully with the Metaverse, it’s likely that there will be similar variances — albeit to different degrees or extents — between its current strategies and those used in a realm driven by AR/VR technology.

  For starters, contemplate the initiatives your business has implemented for its marketing strategy. You might be paying for ads on social media to cast a wider net to rein in a greater amount of potential customers, or targeting existing customers with regular email newsletters to alert them of upcoming events or deals you might have. In the Metaverse, those paid ads might transition from sponsored posts on users’ social media feeds into a virtual brand ambassador traveling throughout different e-commerce sectors in a VR-driven environment to offer exclusive tastings or VIP events. Likewise, your business’s email newsletters could transmute into a kind of exclusive membership program for customers to use solely within the confines of its virtual establishment in the Metaverse.

  As another example, look to your business’s current strategy for handling reservations or private parties for events. When integrating these operations into a fully-virtual space, the tickets or codes used for referring to reservations could become their own kind of non-fungible token or NFT; a digital token representing a reservation. If your business boasts a signature dish or beverage, each sale of this item to a VIP member could come with a transferable NFT that could be redeemed at a later date for additional rewards like a free entree, bottled spirit, or customized apparel for their avatar in the Metaverse. Eventually, it may even be possible for chefs or brewers to mint the dishes or beverages they create as NFTs themselves, offering them greater creative freedom and additional means of providing (and earning) value from niche sectors of consumer markets.

  Each aspect of your business in its current state will need to eventually evolve to integrate with the Metaverse. Whatever that means or looks like will be subjective for each liquor and beverage brand seeking integration with the Metaverse, but nonetheless must be made if you wish to remain relevant and competitive in this next iteration of the digital world.

Final Thoughts

  Regardless of how far off we truly are from integrating our businesses and lives into the Metaverse, its influence has already left a lasting impression on markets and industries the world over. Though selling virtual drinks, beverages, food, or other consumables to customers sounds like a counter-productive initiative better left to the realm of science-fiction, the Metaverse’s projected capacity to blur the lines between our digital lives and physical ones could easily turn this into reality in a matter of years.

  Indeed, the Metaverse is perhaps the most literal representation of a “Brave New World” if there ever is one. The potential for brands integrating their business with this new frontier of virtual reality to experiment with marketing, e-commerce sales, and communication with customers will be essentially limitless. In turning passive consumption into active participation with their brand, the first round of businesses in the liquor and beverage industry to successfully integrate with the Metaverse are bound to set new precedents for the industry’s next generation of innovative technologies and tools.

Tales From the Crypto

Cyndi
gold bitcoin

By: Raj Tulshan, Founder of Loan Mantra

StillFire Brewing is the first brewery in Georgia to accept cryptocurrency and customers are invited to use Bitcoin as payment for beers and other beverages, as well as, their merchandise, which includes t-shirts, caps, gift cards, and more. The small business decided to accept crypto so customers could use a fast, secure payment method, and the brewery owners appreciate crypto’s benefits, including no third-party involvement or bank fees. StillFire uses CoinBase, a Bitcoin payment processor, to handle the payments. CoinBase offers fast, next day deposits and a low fee – just 1% of transactions, as opposed to 2-4% typically charged by credit card companies. Notably, the brewery has joined more than 30% of U.S. small businesses that now accept cryptocurrency, as this payment method becomes more mainstream and popular.

  Threes Brewing, with locations in Brooklyn and Long Island, is also accepting cryptocurrency. The pandemic forced them to adjust their business model, which included updating their website and offering beer delivery direct to consumers. People were excited to buy the brews online and asked the brewery owners to start accepting PayPal. The owners decided to go one step further, offering a cryptocurrency option, as well, which was easy to integrate with their Shopify. Like StillFire, Threes Brewing uses CoinBase as their payment processor.

  Cryptocurrency is a digital medium of exchange that relies on peer-to-peer blockchain technology. It’s decentralized, meaning no central bank or government regulates or backs crypto. Buyers transfer funds directly to sellers without the third parties traditionally used to process payments. And people store their crypto through an encrypted wallet and are the only ones with a key to unlock it.

  Part of the appeal of crypto stems from the surge in credit card fraud that was accelerated by the pandemic. In 2020, the dollar volume of attempted fraudulent transactions rose 35% in April 2020 vs. April 2019, and, sadly, small businesses are often the targets. In contrast, crypto is considered to be a secure form of payment, with merchant protection, lower transaction fees, and other benefits.

  Increasingly, small businesses are accepting cryptocurrency. It’s innovative and trendy, attracts customers and prospects who use crypto, offers more e-commerce opportunities for beer retailers, and can reduce fraud.  And companies like Shopify and Square make it easy to accept crypto. Square even has a crypto team to support development. But is crypto right for your business?

When determining whether to go crypto, consider the following pros and cons.

Pros:

•    It offers lower transaction fees than credit cards. As StillFire and Threes discovered, there’s a lower transaction fee when using crypto vs. credit cards. While each credit card transaction costs a company 2-4% of the total transaction, crypto reduces these costs to less than 1% of each transaction. Over time, these seemingly small fees can amount to a substantial savings.

•    It provides another loan option for businesses. Small businesses often need to take out loans, especially during these disruptive post-pandemic times. Some business owners – especially those with large amounts of cryptocurrency – are opting for a crypto loan, where you pledge an asset (in this case, your cryptocurrency) to secure financing. Crypto loans often come with a host of benefits, including low interest rates, same-day funding, and no credit check.

•    You’ll get your money faster. Tired of waiting several working days for a bank transfer to clear? Crypto is much faster and can be processed almost immediately. Small businesses that need and want their money faster will appreciate this perk.

•    It’s more secure than credit cards. Crypto-

      currency is considered more secure than credit and debit card payments since crypto doesn’t need third-party verification, as these other payment types do. When someone pays with cryptocurrency, their data isn’t stored in a centralized hub, where breaches commonly occur. Instead, their information is stored in their own secure crypto wallet – and they’re the only one with the key to unlock it.

•    Crypto offers some merchant protection. Crypto, with its decentralized set up, protects merchants from fraudulent chargebacks. Transactions are final because no third party can reverse charges, as is the case with credit card purchases. As crypto regulation continues to evolve, there may be more merchant protections introduced in the future, especially as crypto becomes more mainstream and accepted by more small businesses.

•    It opens up more e-commerce opportunities. As Threes discovered, customers want a fast, easy, secure way to shop online. Now, they are selling to people in more than 30 states, accepting crypto as well as PayPal to give their customers purchasing options. Threes was able to expand their audience, moving beyond their New York customer base to sell beer and merch on a bigger, more national, scale.

•    It’s another option for customers. Accepting cryptocurrency offers customers additional ways to pay and provides them with extra protection and security for their transactions.

While cryptocurrency offers a variety of benefits, there are also some risks associated with it, and small businesses should be aware.

Cons:

•    Customers might not be ready for it. Since this type of currency is still relatively new, many people still don’t understand or trust it. Crypto might not be appealing to tech-averse or risk-adverse customers. Using crypto also requires some effort, as customers would need to set up their own digital wallet and learn how to buy with this type of currency.

•    There may be technical barriers for business owners. While Shopify and Square make it easy to add a crypto purchasing option, if a small business doesn’t use those platforms, it might be a bit trickier. Businesses need to set up a digital wallet on a digital currency exchange to accept crypto, which some people find difficult, especially if they aren’t particularly tech-savvy. Also, since cryptocurrency is an ever-evolving, information-dense space with a steep learning curve, it can be an overwhelming option for some business owners. It is volatile and unpredictable.

•    Digital currency is volatile and unpredictable, so if you’re a risk-adverse business owner, this might be too much drama for you. Keep in mind that Bitcoin was first valued in pennies in 2009 but rose to more than $65,000 per coin in February 2021. That’s obviously a huge range! Using a merchant service company, like BitPay or Coinbase, helps protect small businesses against price volatility by immediately exchanging digital currency for its current cash value. Be sure to do your homework, carefully researching cryptocurrency to decide if it’s right for your business (and your personality type!).

•    It’s not completely safe from cybersecurity threats. Crypto reduces the risks associated with credit card fraud, but it’s not completely safe from cybersecurity threats or breaches. There’s no proven way to completely prevent cybercriminals from accessing users’ crypto wallets, and crypto isn’t backed or insured.  Some cryptocurrency companies are working to reduce the risks of security breaches by fully insuring losses, but insurance doesn’t currently cover personal accounts, so you’re still responsible for securing your personal wallet. But if a crypto company like Coinbase is breached, your funds would be protected.

•    There’s uncertainty around crypto regulations. The regulations around cryptocurrency will likely continue to change and evolve over time, which means business owners will have to follow – and adapt to – these changing rules. Since cryptocurrencies are relatively new, the government is still looking at regulations and rules about things like reporting gains and paying proper taxes on crypto transactions.

•    It doesn’t cover basic business expenses. Businesses typically can’t use crypto to cover operating expenses, such as rent and payroll, so they’d need to convert payments to cover these monthly costs.

  Some breweries have adopted cryptocurrency and are proud to be early adopters of this technology.  Others are sticking to the tried-and-true cash and credit payment options. There are pros and cons to crypto, so give it some thought before deciding whether to accept this form of payment. Also, consider your personality and whether you’re willing to learn about crypto – and accept that it’s volatile – before finalizing your decision.

About the Author

  Neeraj (Raj) Tulshan is the founder and managing member of Loan Mantra, a financial advisory firm with best-in-class and proprietary fintech, BLUE (“Borrower Lender Underwriting Environment”). Loan Mantra, Powered by BLUE, is next-level finance: a one-stop-shop for business borrowers to secure traditional, SBA or MCA financing from trusted lenders in a secure, collaborative, and transparent platform. Clients turn to Raj because they know he will always pick up the phone and offer unparalleled financial counsel in a remarkably human—even friendly—way.

About Loan Mantra

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

 Let us help you today! Connect with us at www.loanmantra.com or call us at 1.855.700.BLUE (2583)

Bent Brewstillery:  Innovation on Tap

Cyndi
man posing beside a stack of wine

By: Nan McCreary

Bartley Blume may work twice as hard to produce both beers and spirits in Minnesota’s first combination brewery-distillery, but he also enjoys twice the opportunity to roll out new products that come from his ever-creative brain. They include a hoppy IPA without bitterness and a whiskey aged in American white oak and finished on toasted pimento wood to complement the spice of the grain.

  “When I opened the brewstillery, I wanted to bring more diverse beverages to the market, so we were not always drinking the same old pale ales, IPAs and sours,” Blume told Beverage Master Magazine. “We wanted to get away from mass consumption to a true appreciation of craft beverages, to sip and not swill.” 

  As the brewstillery’s name “Bent” implies, beers and spirits are “bent” and not made strictly to style. “This sometimes comes from combining the best parts of two different styles,” Blume said, “and sometimes from just making something I think my friends and family will like.” 

  Judging by the brewstillery’s success, not to mention its multiple awards, innovation-on-tap has been a big hit with consumers. Clearly, this is the place to go when you want to try something distinctive.

A Way to Make Money Off a Hobby

  Like many craft brewery owners, Blume started making beer as a hobby. While working as an engineer in the aerospace industry— and tiring of the corporate world — his wife gave him a Mr. Beer Kit. “This was in 2007,” he said. “I started brewing little batches of beer and quickly became addicted. I thought to myself, ‘This could be a way to make money off of a hobby,’ so I sat down and wrote a business plan for a brewery.”

  During that time, another brewery opened near Blume’s home in the Twin Cities, adding to the fifth or sixth already in the market. To Blume, that was too many, so he switched his interest to distilling. After poring over distillation books—and crafting whiskey and bourbons on his back porch — he rewrote a business plan for a brewstillery. Combining a brewery and a distillery seemed logical to Blume because the processes are similar, and the skills are complementary. “At the time,” he said, “there were only six brewstilleries in the country. Mine would be the first in Minnesota, which was pretty exciting.”

  Blume introduced the Twin Cities to his first product — and his innovative spirit — at the 2013 St. Paul Summer Beer Fest, wowing the crowd with an American Imperial Stout infused with ghost peppers, the world’s hottest chili pepper. At the time, he was brewing his beers under contract at Pour Decisions Brewing Company in suburban Roseville. Through working together, the two entities decided to merge under the Bent Brewstillery brand. The partnership was serendipitous for Blume. He now had a “home” when breweries and taproom locations were hard to come by. He also acquired the talents of Pour’s head brewer, Kristen England, long-time brewer and Grand Master Beer Judge from the Beer Judge Certification Program.

  After renovating the taproom in Roseville, Bent Brewstillery opened a 1,700-square-foot space in 2014. The taproom seated 115 customers and offered 10 beers on tap. Within months, Blume added the distillery. From the beginning, the brewstillery’s mantra was to set itself apart by creating fresh products and staying at the forefront of innovation. “Even if the market wasn’t ready for it, we’d do it anyway,” Blume said.

  As enthusiastic as Blume was initially, the business presented — and still presents — some challenges in operating as both a brewery and distillery. “Yes, there are some parallels,” he said, “but it isn’t quite as complimentary as I’d hoped it would be. You have to do all the work you need to do for a distillery and all the work you need to do for a brewery.” 

  Specifically, Blume explained that he has to rely on different ingredients, bottle suppliers, distributors, and even different marketing strategies for each entity because the audiences are different. “It’s really twice the amount of work, which is why most people haven’t decided to bite this off.” 

  According to Blume, there are currently only several dozen brewstilleries in the country. “It’s good for me because I’m a workaholic,” he said. “It’s a true family thing. My wife is the bookkeeper and CFO. Even the dog comes to work.”

  Despite the work, or maybe because of it, for a brewer who started with a two-and-a-half gallon Mr. Beer Kit, Blume has seen his vision surpass expectations. Now in its eighth year, Bent Brewstillery has grown into a 20-barrel brewhouse with four 40-barrel fermenters, plus three-, five- and ten-gallon fermenters that allow for the production of small-batch brews. The distillery features a column reflux still with four plates. The still can be converted to a pot still with a restrictor plate on the bottom, designed specifically by Blume for maximum versatility. Annual production is 2,000 barrels of beer and 2,000 gallons of liquor. Beer is sold in the taproom by the glass, pint, growler and crowler. Whiskey is sold straight or in cocktails. Besides offering products in the taproom, Bent Brewstillery distributes 16-ounce cans and liquor bottles to liquor stores and kegs to bars and restaurants. The brewstillery has 450 accounts in Minnesota, the south side of North Dakota and the west side of Wisconsin.

Invent, Innovate and Inspire

  With Blume at the helm as distiller and England as head brewer, Bent Brewstillery continues to invent, innovate and inspire. Since the beginning, it’s brewed over 200 beers. “When we started, we made lots of sour beers, reawakening old-style beers that no one had made until recently,” Blume told Beverage Master Magazine. “Now we have a whole line of sours, including barrel-aged sours and straight-up kettle sours.”

  One of their most unique products is a Chilean Stout, made in collaboration with a local brewery in Santiago and created from ingredients that England brings back after judging an annual beer competition there. Next on the agenda is a cold-fermented IPA. “Fermenting an IPA cold as opposed to fermenting it warm is extremely rare,” Blume said. “The process makes it more crisp, clean and clear. It’s the opposite of the hazys.”

  In the spirits category, Bent Brewstillery offers a traditional vodka and a nontraditional gin with 14 different botanicals. Blume prefers to use fresh botanicals when he can get them, which means the gins will vary from batch to batch. Some products are especially distinctive:  Flame Bringer, a bourbon barrel sriracha-infused rum, and Tropical Whiskey, brewed and distilled like any other whiskey, but includes passion fruit, guava, coconut and citrus, added during distillation. “These are the little fun things that make us distinctive in what we create,” Blume said. “These spirits are all great by themselves, but they really compliment a cocktail. Our signature drink is the Old Fashioned created from our whiskey, and the sriracha-infused rum makes a great spicy Margarita or Bloody Mary.”

  According to Blume, it took a while for the public to accept his distinctive beers and spirits. “At first,” he said, “people would say, ‘Oh, that looks weird. It’s different. I’m afraid of that,’ but now I can’t keep those products on the shelves.”

  Customer preference is mixed, Blume said: 50% like the same beer all the time because they are familiar with it; the other 50 percent want something new. It’s the same split in the liquor stores and bars. Blume also sees a mixture in beer versus spirits preferences. “Having a taproom that serves both beer and cocktails is huge for us,” he told Beverage Master Magazine. “We get so many ‘mixed couples,’ where one likes beer and the other prefers spirits. Instead of drinking a beer here and then leaving to get a cocktail, they simply stay here. It’s been pivotal to our growth.”

Pandemic Problems…and Solutions

  Like all breweries and distilleries, Bent Brewstillery’s growth took a big hit during the pandemic. But, again, like others, it turned lemons into lemonade by making hand sanitizer. Blume dived into this project with both feet. The brewstillery bought tankers of ethanol and produced 65,000 to 70,000 gallons of hand sanitizer. It provided supplies to a large portion of the police and fire departments in the state and to hospitals and support companies. Bent also offered raw materials to distilleries at cost so those distilleries could help their local communities. “We went all out,” Blume said, “and it’s a great feeling to know we did so much to help. We had a supply of beer and spirits in our taprooms, so at least we were able to sell products to-go. We survived just fine.”

  With the pandemic waning, Blume plans to go “full-throttle” ahead, both in creating new products and staging events. Traditionally, the brewstillery has offered a winter luau, beer dinners, a St. Patrick’s Day dinner and car shows in their large parking lot. This year Blume hopes to bring back one of the brewstillery’s biggest events — a crawfish boil that attracted 2,500 people. Bent also plans to hold its annual barbecue competition on the anniversary of September 11. The competition, which draws 25 to 30 cooking teams, is a fundraiser for the Invisible Wounds Project. The local charity provides services to Minnesota’s military, first responders, front-line medical staff, corrections, dispatch and their families relating to mental health, PTSD and suicide issues.

  Blume and his staff (the brewstillery has seven employees, not counting the dog) will continue to innovate, always looking for new opportunities. “We’re always looking to grow,” he told Beverage Master Magazine. “On the brewing side, we want to keep giving people something different to try. With the sheer number of breweries out there that are coming out with new beers, people can literally have a beer every day and never have the same beer twice. On the distilling side, we are playing around with different products that people will hopefully like. Growth is difficult, but it’s the challenge we signed up for.”

For more information on Bent Brewstillery, visit www.bentbrewstillery.com