Category: Brewery

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

Cyndi

By: Hanifa Sekandi

bartender mixing alcohol

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

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

The Heat of Mexico: Tequila

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

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

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

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

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

Feel the African Spirit: Brandy

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

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

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

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

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

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

The Tranquility of Spirits in India: Whiskey

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

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

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

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

“SHOW ME THE MONEY”

Cyndi

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

By: Quinton Jay

dollar bills flying

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

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

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

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

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

Understand the Realm of Private Equity Investments

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

Private Equity Funding

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

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

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

Alternative Lenders (Non-Bank Financing)

  Some sources of alternative financing include:

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

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

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

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

Traditional Lenders (Bank Financing)

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

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

Finding the Right Investor for Your Brewery or Distillery Business

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

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

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

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

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

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

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

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

Showing What Investors Want to See in Your Business

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

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

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

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

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

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

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

GETTING CRAFTY: How the Beverage Industry Can Secure Business Funding

Cyndi

By: Raj Tulshan, Founder of Loan Mantra

hand holding dollar sign

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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About the Author

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

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

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

About Loan Mantra

Loan Mantra

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

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

BREWERY AS A BUSINESS: Important Points to Consider

Cyndi

By: Jess Perkins

man writing on paper

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

Staffing

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

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

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

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

Labor Laws

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

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

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

Pricing

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

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

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

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

Branding

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

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

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

Taxes

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

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

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

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

Competition

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

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

Growth and Expansion

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

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

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

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

Cyndi

By: Becky Garrison

man carrying stack of beer on his shoulder

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

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

Half Time Beverage

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

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

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

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

Tavour

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

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

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

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

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

Localized Craft Beer Distribution

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

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

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

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

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

DIY Beer Distribution

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

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

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

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

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

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

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

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

Merchant du Vin: Specialty Beer Importer

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

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

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

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

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

Types of New Software & Technology in the Beverage Industry

Cyndi

By: Alyssa L. Ochs

statistics appearing on iphone

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

How Technology Can Improve Beverage Production

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

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

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

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

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

Technology Spotlight: Refractometers

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

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

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

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

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

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

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

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

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

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

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

Benefits of Trying New Software and Technology

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

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

Choosing the Right Tech Upgrades for Your Business

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

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

Sustainability in Craft Brewing:

Cyndi

A Journey Without An End

By: Gerald Dlubala

4 beer bottles on solar panel

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

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

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

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

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

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

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

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

Carbon Capture Is Within Reach

For Craft Brewers

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

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

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

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

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

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

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

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

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

Packaging for a Sustainable Future

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

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

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

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

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

The Potential For Tax Credits Is Out There

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

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

Exploring the Intersection of Beer and Whiskey

Cyndi
beer and whiskey

By: Becky Garrison

As James Saxon of London based Compass Box observes, historically, distilleries often grew out of breweries or operated alongside them with the union of beer and whisky rooted in process. “Until the 1950s and 1960s, many distilleries would even use yeast cultured and maintained within breweries to ferment their wort. We are starting to see more distilleries re-introduce brewers’ yeast for the flavor impact it can have.”

  Also, Saxon finds the role of the malt recipe or ‘mash bill’ for brewers to be fascinating. “I see the balancing of pale, crystal and chocolate malts to drive flavor and mouthfeel in beer as related to how we introduce different degrees of toasting and charring to the casks we use for whisky maturation.” In his estimation, both drinks benefit from the blender’s ethos. “When enjoyed together, you can experience the skillful layering of texture and flavor in new ways, discovering hidden qualities in the beer and surprising flavors in the whisky.”

  StormBreaker Brewing, a Portland, Oregon based brewpub known for offering whiskey beer pairings, launched Brewstillery in 2014 as a way of showcasing the range of beer and spirit pairings possible among Pacific Northwest brewers and distillers. Traditionally, this festival WAS held in February to commemorate the month when StormBreaker launched. This event featured 20 brewers and distillers paired together along live music and special food offerings with proceeds going to support the local charity Dollar for Portland. (While the festival was on hold due to Covid, StormBreaker hopes to launch the festival again in 2022.)

  When Sebastian Dejens, owner, Stone Barn Brandyworks in Portland, OR was invited to the first Brewstillery, he found this event represented a wonderful opportunity to pair up with some brewers for some creativity and discovery.  Three years into this festival, he told StormBreaker founders

Dan Malech and Rob Lutz that he would buy mash from them if they came up with a window of opportunity.

  For a few days the entire brewing capacity focused on producing roughly 150 gallons of beer. Dejens picked up this beer using a 275-gallon tote placed on the back of his truck that he filled from the tank.  Malech describes their brewing process for this particular beer. “We took our Red and bumped up the grain bill and the kettle hop additions for an intense hoppiness, complemented by a spicy dryness from the rye, but balanced nicely by malty caramel flavors. After fermentation we got hop crazy and dry hopped this beer with 3 lbs/bbl for an explosion of tropical fruit and a citrus nose.” Malech and Lutz named this beer “Good Not Great” (ABV: 8% IBU: 76) which went on to receive a gold medal in the 2020 World Beer Cup Awards in the Imperial Red Ale category.

  In 2020, Dejens released his first whiskey made from this beer. The name of this 92-proof whiskey Barnstormer is a mashup of the names Stone Barn and StormBreaker, with the whimsical label produced by StormBreaker’s label designer. This whiskey had a malty brown sugar sweetness with a nutty finish. Since this initial venture, Dejens continued to collaborate with StormBreaker each year on producing a barrel of whiskey using StormBreaker’s beer. In 2020, Dejens made two barrels as Stormbreaker had increased their barrel capacity. “There needs to be an element of space in the process. You’re making this for three to five years down the road, and you’re just hoping it’s all going to turn out,” Dejens reflected.

  Joshua M. Bernstein, a Brooklyn-based beer, spirits, food and travel journalist, parses the similarity between beer and whiskey from a production standpoint. “Beer and whiskey share a common starting point: grains are simmered to make a sugar-rich broth on which yeast feast, creating alcohol. Typically, a major difference is that distilleries are usually concerned with getting the most sugars (read: potential alcohol) from their grains, then letting the barrels contribute the lion’s share of flavor and aroma. Contrasting that, breweries use a full suite of grains, even darker-roasted ones that contribute fewer fermentable sugars. But now we’re seeing distilleries such as Westland Distilling in Seattle, WA take a craft brewer’s approach to grain selection, building big flavors with any and all grains before the distillates touch wood.”

Craft Brewers Turned

Single Malt Whiskey Distillers

  When Jason Parker, former head brewer with the Seattle based Pike Brewing Company, decided to co-found Copperworks Distilling with Micah Nutt, they knew they couldn’t compete with those established distilleries known for distilling spirits via traditional methods. Their process resulted in products with consistent flavor profiles that have been recognized by consumers for hundreds of years.

  So, they wondered what would happen if they were to distill high-quality beer. “We left the hops out of the beer to keep out the bitterness, and then distilled the beer into vodka, gin, and whiskey,” Parker noted.

  Positive customer feedback led Parker and Nutt to conclude they could produce quality spirits without following traditional distilling techniques. For example, brewers turned distillers such as Parker and Christian Krogstad, founder of House Spirits Distillery in Portland, Oregon, use yeasts and grains that are utilized by many craft brewers but not found in spirits produced by traditional distillers.

  Also, Copperworks is one of the few distilleries that produces a sanitary fermentation—the way breweries do—by boiling their wash for an hour. This process drives off some of the water thereby concentrating the sugar content and sanitizes the wash. When fermented with brewer’s yeast, this produces clean fruity and floral flavors, rather than the sour flavors produced by traditional methods. “All brewers know that boiling their wash kills bacteria and wild yeasts and results in a beer that tastes better and lasts longer. But if you do this for a distilled spirit, it results in new flavors and aromas, unlike the tastes of traditional spirits.” In addition, they leave unfermented sugars in their fermenters, which when distilled and barreled, produces a sense of sweetness in their spirits that’s more commonly associated with craft beers.

Beer and Whiskey Pairings  

  In Parker’s estimation, hops can be so dominant in beer that one cannot discern the beer’s base malt flavor. Hence, his preference when pairing whiskey and beer is to drink a beer low enough in hops so that he can taste the malt. “If I’m lucky enough, I can drink the beer followed by the whiskey being made from this beer,” he states. In particular, Parker loves beer cocktails such as those made at the Seattle based Pike Brewing Company’s seafood restaurant Tankard & Tun which features cocktails made with Pike Brewing’s beer and Copperworks spirits. Beer can provide the sparkling effervescence in cocktails normally obtained via Prosecco or carbonated water along with some sweetness and spice (hops). Parker notes that these cocktails aren’t often on most cocktail menus as this isn’t a skill set practiced by most bartenders. “The challenge is to use a small enough amount of beer to turn it into an effervescent cocktail without having it become a boozy beer,” he opines.

  Saxon is always inclined to start with pale ales and IPAs for their whiskies. “Many of our products have a creamy character thanks to American oak maturation and this mellows the hoppy bite of the beer. Equally, the citrus and tropical flavors of these brews can pull out the subtle fruit notes concealed within the whiskies we use.” Among their favorite pairings included The Spice Tree with a brown ale from the Kernel Brewery, based – like us – in London that was malty, toffee-sweet and richly nutty all at once. So flavorsome and just deliciously pleasurable. “Definitely a boilermaker for the autumn,” Saxon mused. 

  Wanderback (Hood River, OR) chief whiskey maker, Phil Downer prefer their malt forward whiskey paired with a brown ale, porter, or stout. “The malted barley we use for our whiskey are similar to the malts used to make these beers, so they are an easy pairing.  I should generally pair a lighter beer like a pilsner or lager with a lighter whiskey, like a Crown Royal Rye or lighter bourbon.” A purist Downer prefers to sample beer and whiskey separately. “I like them usually on their own to appreciate all the fun things going on in each.”

Innovation Helps Modernize Brewing Equipment

Cyndi
man writing in clipboard

By: Alyssa L. Ochs

At Beverage Master Magazine, we’re always looking to keep up with craft brewing trends, which more often than not relates to pieces of innovative equipment and new technologies. Certain types of new equipment are slowly but steadily being introduced to breweries, as are new technologies, tools, mechanisms and improvements to processes relied upon in the past.

  These things factor into how efficiently breweries can operate during challenging times and how memorable their beers are when they reach consumers. To learn more about the role of new equipment in the modern brewery setting, we looked into what’s being used in breweries lately and what industry leaders who work in this space are saying.

Types of Equipment & New Changes

  There are a few essential equipment types that breweries use today. Examples include the malt mill, mash tun, filtration system, heat exchanger and brite tank. Breweries also regularly use pumps, valves, kegs, hydrometers and equipment for dispensing and packaging.

  While experienced brewers are already familiar with all of these things, they might be interested in new equipment options and types of technology to potentially save time, money or labor. Certain machinery may preserve hops better, improve quality control or keep processes more consistent for a better result. Meanwhile, new technology might facilitate multi-purpose machines in a small space or accommodate a shift to using more cans as the business grows. As the industry continues to trend toward aluminum cans, canning equipment is in demand and being considered by brewers who have traditionally stuck to glass bottles.

Equipment and Technology Worth Learning About

  These days, there are fully automated, multi-vessel systems to serve breweries’ needs and specialized wort aeration and oxygenation equipment to

improve brewing processes. Developments have been made to pneumatic conveyors that remove spent grains and tank systems that save water and conserve energy by using compressed air instead of CO2 and have recyclable inner bags. Meanwhile, sustainable design and build practices have been gaining traction for environmental stewardship, future economic vitality and customers’ social enrichment.

  We’ve been following specific advancements, including BrewSavor’s kink-resistant hoses, Thielmann’s multi-purpose aseptic containers, and Twin Monkeys’ low-key and affordable automatic canning line. IntelligentX software compares supply chain and production constraints with beer drinkers’ preferences, and FliteBrite created a “smart flight” serving system to assist menu development at establishments serving craft beer.

  Other machinery and technology-related updates include fully automated, stainless steel crossflow filters for better beer filtration and automated brewing systems with touch screens and mobile technology graphics. These brewing systems are equipped with artificial intelligence features that give feedback on beer produced while integrating customer feedback with manufacturing data. Some professional brewers are not particularly interested in all these “bells and whistles” and believe they are not worth the money and extra staff training to do what they already do best. However, new breweries and current establishments undergoing transition may be curious to adopt a few practical, high-tech features to create a more automated, organized or modern operation.

  Even some seemingly simple pieces of equipment, such as kegs, have been updated to make them more suitable for the current brewing environment. Now you can find stainless steel barrels with automated control systems for better precision and slim diameter kegs to store beer in limited spaces.

  Justin Willenbrink, Blefa Kegs’ sales director for North America, told Beverage Master Magazine that while not much has changed over the years concerning stainless steel kegs, the innovation comes from the barrels’ safety and quality.

  “Each keg from Blefa comes with an integrated pressure relief valve to reduce the risk to producers and on-premise staff by creating a safe failure,” Willenbrink said. “Quality has been the cornerstone of our company for more than 100 years. Durability can only be guaranteed by high-quality material, reliable operating production equipment, highly qualified staff and high-precision manufacturing according to your specifications. These high-quality standards allow us to be the only manufacturer of stainless steel kegs in the world to offer a guarantee of 30 years – a promise to all our customers that they have purchased a reliable and extremely durable asset.”

  Blefa and American Keg partnered in early 2020 to serve the North American market with a domestic manufacturer. Since then, the companies have been working together to upgrade their equipment and support U.S. customer needs, ensuring that efficiency gains in production align with the quality standards of both companies.

  “As a world’s leader in stainless steel packaging, Blefa and American Keg can provide various sizes from 10 liters to 59.62 liters. The U.S. 1/2 bbl, slim 1/4 bbl and 1/6 bbl are the most popular for both on- and off-premise needs. All kegs from our stock are equipped with drop-in D-Type spears from Micro Matic,” Willenbrink said. 

Buy New, Used or Lease?

  When brewers think about updating their equipment, dollar signs often flash before their eyes as new equipment costs start adding up. However, there are options available for breweries on tight budgets, such as leasing new or buying used equipment still in great condition.

  Canning lines are among the most common systems that breweries debate about buying or leasing. Leasing involves entering into a legal agreement for a specified time and works somewhat like a loan. At the end of the lease period, the effectiveness of the equipment may be significantly diminished and therefore not an attractive purchase for another brewing operation. However, you may be able to purchase your current machine for a discounted price. As long as it is still in good working condition, this is an ideal option since staff would already be familiar with it, and you would not encounter any delay in production.

  Capital leases are common, especially when a brewery is only looking to update a single piece of equipment rather than start from scratch or do a total equipment overhaul. It may be beneficial to have a lawyer look over any lease agreement before signing to check the interest rates, accounting implications and terms of the lease in case of equipment malfunctions and who is responsible for repairs. Other considerations include any plans for expansion, durability and logistics of getting equipment into and out of the facility.

What’s Next for Brewing Equipment and Technology?

  There’s a lot to look forward to for brewers who keep an eye out for the next great invention. Many manufacturers and suppliers have a finger on the pulse of the industry and can anticipate the needs of brewers in the years ahead. These companies’ successes depend on how well they change and adapt to the shifts and evolutions of the industry, especially during pandemic times.

  When asked how brewing equipment can best adapt to the changing needs of the modern brewery, Willenbrink said stainless steel kegs are the most well-equipped for providing a quality product because they protect the beverage from harmful UV light and oxidation while ensuring that quality isn’t compromised. 

  “Not only is it the most profitable package, but it is also the most sustainable with stainless steel kegs being 100% recyclable,” he said. “When it comes to the packaging of beer, wine or soft drinks, kegs made of stainless steel offer the best protection. In their reliability, economic efficiency and sustainability, our kegs provide first-class results.”

Willenbrink’s advice to breweries looking at new equipment is to never compromise on quality and make investments in assets that offer maximum safety and reliability for your needs.

  “By choosing a quality supplier, you are making a decision to work with a company that has invested in automation and quality control systems that ensure the highest level of precision and process,” he said. “Comprehensive support from first contact through delivery and continuing with service capabilities from highly qualified technical staff ensure experience and commitment to each investment made.”

  With more automation, there should be greater consistency from one brewer to the next, something vital during staffing changes and high service industry turnover rates. Yet, these machines and technologies don’t remove brewers from their craft; they simply eliminate tedious processes so that beverage producers can have more time to be creative and take their passion for great beer to the next level.

Precision in Canning and Bottling Craft Beer

Cyndi
pile of beer cans and bottles

By: Cheryl Gray

The can or bottle of craft beer consumers select from store shelves is more than attractive packaging. The elements that go into fabricating, filling and sealing those containers can make the difference between a flat beer, leaking containers, or worse yet, a contaminated product.   

  To avoid these pitfalls, craft brewers turn to companies whose specialties are to help the brewing industry protect its most important asset—the beer it makes. There is expertise to address virtually every need that brewers, large and small, can rely upon to meet their production needs.

  American Canning is one of those experts. The company, headquartered in Austin, Texas, launched in 2013 making equipment, supplies and mobile canning services accessible to craft brewers regardless of their budgets. Clients navigate the company’s user-friendly e-commerce site to order as many or as few supplies as needed. Most items are shipped on the same day. Melody Meyer is Vice President of Sales and Marketing for American Canning.  

  “As a mobile canning company, supply distributor, and machine manufacturer, American Canning is uniquely positioned to help brewers understand and evaluate all facets of a value-driven canning operation. It specializes in the craft beverage space and is equipped to address customer needs from planning, to supply procurement and production execution.”   

  Meyer cautions that assessing a brewery’s packaging requirements involves more than just machinery. As canning needs and goals are addressed along with space, labor and financial considerations, Meyer says that there are two more essential questions for a brewery to keep in mind.   

  “What is the total volume and type of can-packaged product that needs to be canned? And how will it be packaged?”

  Meyer adds that once these questions are addressed, American Canning readies its clients for next steps in the ever-changing packaging environment of the craft brewing industry. 

  “Considerations must be made from all available options, including manual vs automatic, atmospheric vs counterpressure, in-line vs rotary, and intermittent vs continuous motion with regard to each’s capacity, quality, consistency, repeatability, ease-of-use. Small batch packaging of one beverage type for on-premise service may best be accomplished with a compact and cost-effective, countertop filler/seamer whereas larger-scale distribution of numerous products in multiple can styles would require a more robust, flexible, and higher speed counterpressure, rotary line.

    While I can’t speak for every manufacturer, American Canning is focused on engineering products with the highest quality process controls, at an approachable price point, for compact craft spaces, all while being incredibly easy-to-use with minimum operators and little to no product waste. It’s a tall task, but our two filler/seamer machines have already achieved these goals. We simply believe we can expand upon our foundation into a variety of machines with different speeds and filling capabilities, not to mention the ancillary machines that are needed to surround a filler seamer, such as infeed tables and can handle applicators.” 

  SKA Fabricating in Durango, Colorado is another manufacturer with its eye on the future packaging needs of craft breweries, providing its customers with a wide range of depalletizers, conveyors, and packaging line equipment. The company was founded in 2012 by craft brewer Matt Vincent, whose award-winning Ska Brewing is touted as the

largest in Durango. While Ska Fabricating was born out of necessity to address the brewing, packaging and distribution of Ska Brewing, its innovations help breweries around the globe. With more than 1,000 clients across the United States and abroad, Marketing Director Elise Mackay says that the company is well-positioned to handle virtually any packaging need. 

  “Ska Fabricating provides total packaging lines from beverage to non-beverage industries across the globe. They range from canned or bottled beer, cannabis, kombucha and coffee to aerosol or paint cans and spice jars. We are well-rounded and diverse enough to handle just about anything. Our systems can range from a 20’ x 20’ square at 20 containers a minute to a 60’ x 60’ square running 250CPM and above! We do everything we can to accommodate the space and speeds of a prospect’s needs.” 

  Mackay explains how the company has adapted to the changing demands of the craft brewing industry and how it works with clients to create the most cost-effective solutions. One major decision is whether to opt for automated or manual systems. 

  “Automation is key when it comes to running an economic line and has a number of upsides compared to manual systems. Our manual systems are available for half-height use which is ideal for a low-budget startup but requires more personnel. When the time is right, we have several solutions to help in the next steps of automation. 

  We are constantly striving to make our products better and have adapted over the years through various market changes and requests for specific additions. Anything from safety, line controls, and using our date coding system to hit the bottom of the can instead of the flange are being implemented.” 

  California-based XpressFill Systems LLC manufactures a wide range of can and bottle filling systems designed with ease of use and longevity as top priorities. The company, headquartered in San Luis Obispo, was founded in 2007 and serves multiple industries, including craft brewing. Technology is a primary focus. The company offers several models that capture volumetric, level fill and carbonated beverage technology.  Rod Silver, who spearheads Marketing and Sales for XpressFill Systems, describes features of some of the firm’s products, which he says are affordable, compact and easy to use. 

  “The volumetric filler controls the amount of fill with the use of a very precise timer. The filler is calibrated to your specifications and is capable of very accurate fills, regardless of inconsistencies that might exist in the bottle glass. …The level filler controls the amount of fill with the use of a level sensor. When 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 approximately 1/16 increments. Both the volumetric (XF260/XF460) and the level filler (XF2100/XF4100) have a self-contained, self-priming pump that draws the liquid from any barrel or carboy. There is no reservoir, the liquid flows directly from the bulk container, through the filler into the bottle.” 

  Silver adds that XpressFill Systems offers a pair of fillers for bottling and/or canning carbonated beverages.  

  “The XF4500C is a counter pressure system capable of filling 200 12 oz cans per hour. The XF4500/XF2500 is a counter pressure filler for bottles. We also offer an open fill system, the XF2200 (2 spout) and XF4400 (4 spout) capable of filling 300 / 600 cans per hour. All systems have a pre-fill CO2 purge cycle. The counter pressure system requires a minimal air compressor to operate the pneumatic actuators. Open can fillers have a moveable shelf that is easily adjustable for various can sizes. The maximum can diameter is 4 inches. The counter pressure filler has a stopper that must fit snugly into the can or bottle opening to seal and pressurize the container. Our standard opening for cans is a 202-lid size but custom stoppers can be made.” 

  For craft breweries that opt for cans, seam protection is an important consideration. OneVision® Corporation, founded in 1994, shares its innovations with the craft brewing industry throughout North America and Europe. The Ohio-based company, located in suburban Columbus, offers can seam inspection equipment that helps breweries monitor double seam quality for their beer products. Regularly inspecting and tracking internal double seam dimensions helps to prevent leaking seams and beer from going flat. Marketing Manager Amy McKee describes the features of the company’s signature product. 

   “OneVision® has developed the SeamMate® Craft Beverage System that includes all the necessary equipment and software craft brewers need to properly inspect and track the quality of can double seams. We conveniently offer system bundles ranging in price and equipment dependent on a brewery’s canning operation. All system bundles can be upgraded as a brewery’s canning operation grows.   

  SeamMate® System software now includes a proprietary measurement that estimates double seam tightness by analyzing the double seam cross-section. This new measurement is especially effective at detecting too-tight seams on beverage cans. This measurement provides inspectors and quality managers with assurance that the visual cover hook inspection was accurate, or it can serve as an alternative to manual cover hook removal.” 

  Innovation is perpetual at OneVision®, says McKee, pointing to the latest feature available with the SeamMate® System. 

  “SeamMate® System includes the optional AutoAlertTM that automatically analyzes measured data and alerts users to potential double seam quality issues. This unique function helps predict and prevent seam leaks.”   

  Whether bottling or canning beer products, experts say craft breweries should plan for growth, which includes the decision on whether to go either automated or manual–or somewhere in between.  It comes down to when to invest for expansion.  XpressFill Systems’ Rod Silver explains it this way.    

  “The primary factors in evaluating the benefits of each are (the) cost of equipment, rate of production, cost of maintenance, cost of labor and equipment lifetime.”