Category: Brewery

Do’s & Don’ts of Opening Your Microbrewery

Cyndi
Thoughtful young man in casual shirt holding note pad and looking away while leaning at the wooden barrel with metal containers in the background

In The Microbrewery Handbook we discuss a variety of topics that can have a positive or negative impact on your brewery ranging from financials to operations to zoning, equipment and employee engagement.

  I wanted to share a few key do’s and don’ts of opening or operating your own microbrewery based on our experience opening Perfect Plain Brewing Co., a taproom-focused brewery in the heart of downtown Pensacola, Fla.

  We often focus on the part of the business we are passionate about: Beer. That’s understandable, but in an ever-evolving market, it can sometimes lead to a lack of focus on other important pieces of running a successful operation.  Let’s dive into some do’s and don’ts.

Do What you Know & Know What You Don’t

  Ego gets the best of all of us at one time or another. We think we know how to do something; we think we know the right way to handle something, we think we have the objectivity or perspective to make a sound decision on something. And sometimes, after it fails, we realize that perhaps we could have used some help.

  This happens all the time in business. Would you open a brewery without anyone on the team having any knowledge about beer? Likely not. Ask yourself why so many breweries open without consulting in help with banking, with accounting, with hiring and onboarding employees, or with sound expertise in customer service.

  The reality is that most often, people gravitate to their comfort zone. So if you’re a brewer, you focus on the beermaking and very little on the other things. And vice versa.

  Point is, it’s a major help to ensure your leadership team, or your mentors as you begin your company, provide a litany of expertise. Surround yourself with smart people who can fill the gaps in your skill set.

  I was fortunate to have Reed Odeneal, a friend, to start as director of brewing operations. I didn’t come from a brewing background, instead my expertise was in marketing, messaging, branding and operations. We complemented each other, and that has proven quite valuable so far.

Be Meticulous in Your Hiring & Onboarding Process

  Ask yourself: What is your hiring process? How do you onboard employees? Do you have standards or procedures for these things? In the Microbrewery Handbook I lay out a three-step interview process that I migrated from the health care industry and adapted to our specific needs. It allows the owner, the direct supervisor and the new hire’s peers to all have a say in the people who join our team. It’s a format that provides a sense of ownership for all and accountability to each other to make new hires successful.

  In the hustle of opening a new business, standards like these are so often disregarded. We “fly by the seat of our pants.” But realize this: The cost of one position turning over in the hospitality industry is more than $5,000. Why? Lost productivity, additional training hours, loss of regulars for that person, paying overtime to cover shifts, etc. That doesn’t even factor in the stress of hiring again, new faces, onboarding them and the other psychological variables that come into play.

  So knowing that, it seems like clarifying your hiring and onboarding should be a higher priority, right? Tie this financial outcome to the consequence of hiring poorly and you’ll quickly see that spending some time working on these processes are a major benefit.

Give Your Employees a Sense of Ownership

  At Perfect Plain, we share our financials with every member of our staff upon request, and we remind our staff of this at every meeting.

  We have a three-person peer interview panel – the final interview for all potential new hires – and if our peers don’t say yes to them unanimously, we don’t hire them. We are the first bar in our region to offer comprehensive health benefits to all full-time staff.

  We give each bartender $25 per shift to do the right thing without having to consult a manager to void. A spilled beer, a birthday celebration, etc.

Why do we do these things? Simple. We ask that our staff have a sense of ownership. We want them to treat their job like it’s their own place. Every business owner wants that, right? Well, ask yourself: What are you doing to provide a sense of ownership? It’s easy to request that your staff act like owners, but too often it’s a one-way street. We expect that but provide nothing to make them feel like owners.

  I challenge you, even if it’s just one or two steps, to empower your staff with some ownership-type information and responsibilities. I know it seems awkward.

  Let’s use sharing the financials as the example. The feedback I get most often when I present a brewery owner with this fact is some kind of concern that if they see the business being successful, “everyone will ask for a raise.”

  Research has proven this point to be false. Let me tell you what actually happens. Your bartenders and brewers probably see the daily sales reports coming through, and if you’re doing well, they see big numbers, right?

  Do they know how much insurance costs? Do they know about your $2,000 power bill each month? Do they know how expensive supplies and materials are? I’ve experienced that when you share financials, more often than not your staff is surprised at what it truly costs to operate a business. When they only see revenue, and not the profit and loss statement, they likely thing profits are much higher than normal.

  And at the end of the day, I offer this: If your company is doing so well that a staff member asks for a raise down the road, I can think of a LOT bigger problems you can be having as a business owner.

Don’t Undersize Your Brewhouse to Save Money

  A sound business plan will outline a range of top line revenue needed to make your brewery break even or turn a profit.

  It’s surprising how many people go through the laborious process of calculating these sales numbers, then you realize that because they’re trying to save money the first thing they do is downgrade the size of their brewhouse. Fitting your equipment to match your revenue goals and future potential is a must.

  Let’s say you were buying a car that was slightly out of your price range. Would the first thing you ask them to do to cut costs is take 50 percent of the horsepower out of the engine? Of course not. You need most of those horses just to pull the weight of the vehicle efficiently. You’d likely find some features you like but could live without. Or perhaps you cut other things in your personal budget so you can afford the vehicle.

  The brewhouse is the engine. You can only make as much beer as your labor and equipment allow. If you need a 10-barrel brewhouse and to save money you cut it to five barrels, then double your labor cost because you’re having to brew around the clock, are you saving money? Of course not. You’ll pay back those “savings” in the form of labor, repairs on equipment needing maintenance faster, etc.

  I’m not suggesting you bust your budget. What I’m suggesting is that a sound budget factors in the need for your company to produce product efficiently and at scale. So I’m all for saving money, but this is one place where your revenue goals and your equipment need to match. Don’t say you’re going to produce 1,000 barrels per year on a 2-barrel. If you need 1,000 barrels to make money, then get the proper amount of horsepower to make your business sustainable. 

Don’t Treat Your Taproom as an Afterthought

  This is one of the more common mistakes seen in taproom-focused breweries around the nation. There’s so much focus on the beermaking process, and what could make that process easier. But reframe the mindset: What’s the use of spending thousands of dollars on equipment that can speed up your brew day by 90 minutes … if no one is there to drink that beer?

  Craft beer consumers delineate between quality, no question. Don’t misread this as saying that quality doesn’t matter. It’s vital. However, reaching a certain quality standard – and knowing that yourself and at least a handful of your competitors will be in that same zone – engaging customers with an exciting taproom and fun vibe will produce more results for your business than that extra equipment ever could.

  At this moment in the craft beer movement, this fact is only becoming more prevalent. Competition continues to saturate markets all over the U.S. I wrote an entire chapter on making sure every brewer and every brewery owner asks themselves “What makes us different?” I would always include a large investment in the taproom as one of the safest ways to create some uniqueness in your market.

Suds & Soldiers: Beer and World War I, 1914-1919

Cyndi
beer carriage

By: Doran Cart, Senior Curator, National WWI Museum and Memorial

By the time of World War I, which started in 1914, beer was already an ancient beverage made and consumed by most the nations involved in the war. In light of the long history already written about beer, this article will center on the personal, official and period-printed references of beer during World War I held in the archives of the National WWI Museum and Memorial in Kansas City, Missouri.

  Many of the early war photographs show soldiers, especially German, posing for their gone-to-war photographs with beer mugs in hand and often sitting on beer kegs. Ceramic beer tankards were illustrated with scenes of soldiers’ service so they could be reminded of what they had gone through while enjoying their favorite brew. A German/Anglo brewery in Tsingtao, China was in production at the beginning of the war and was there when Japanese forces attacked the German garrison taking control. A graphic illustration of that attack is on exhibition at the museum. The brewery still exists.

  Changes in the opening and closing hours of pubs in England occurred during the war when the situation became dire from many of the war industries’ workers spending more time drinking beer and “other intoxicating liquor” than producing artillery shells and airplanes. The Defense of the Realm (Consolidation) Regulations of 1914 specifically prohibited the sale and consumption “on weekdays 12 noon to 2:30 p.m. and 6 p.m. to 9 p.m. and on Sundays [the same hours].”

  British soldiers wrote in their diaries about beer:

“Hallowe’en was celebrated in our billets – beer, soup, roast beef, plum duff.” A. Stuart Dolden, 1st Battalion, London Scottish Regiment

  October 1916 – “I was amazed to get two bottles of Guiness to drink.” George Coppard, British Machine Gun Corps, after being wounded.

  C.H. Williams, 5th Battalion, the Oxfordshire and Buckinghamshire Light Infantry, British Army, wrote after Christmas of 1916: “We had our Christmas dinner in Albert, France in an old sewing-machine factory.  We had beer for our dinner – plenty of it – and a good tuck-in to go with it!  Roast pork!  Beautiful after bully beef!” [Bully beef was canned processed beef issued as a ration].

  In England in 1918, the Hart Family Brewers produced a commemorative extra pale ale called the “Flyer.” It was brewed to honor Wellingborough, England’s “Own Flying Ace, Major Mick Mannock.” Major Mannock was a Victoria Cross recipient for his World War I actions in which he recorded 61 aerial victories with the Royal Flying Corps (later the Royal Air Force). He was killed over France on July 26, 1918.

  Although the American Expeditionary Forces were technically “dry,” prior to the US 18th Amendment ratified in 1920, enterprising soldiers soon learned where the beer and wine were. One US Signal Corps photograph is captioned: “American soldiers in a captured German trench drinking beer out of steins and smoking cigars.”

  From the papers of Captain Clarence J. Minick, 361st Infantry, 91st Division the following order was found: “Headquarters 3rd Battalion, 91st Division, Sarrey, France, July 24, 1918. Extract General Order No. XXI. 1. “The following regulations for the government of troops billeted in Sarrey are hereby published for the guidance of all concerned: (a) Cafes will be open to troops for sale of light wines and beers during the following hours: 1:30 A.M. to 1:00 P.M. 6:00 P.M. to 9:00 P.M. Absolutely no drinking of other intoxicants will be permitted and all cases of intoxication will be summarily dealt with. Wine or beer purchased in cafes will be used on the premises and not carried away in bottles or other receptables.”

  At the Battle of St. Mihiel, France, September 1918, this report of the 353rd Infantry Regiment, 89th Division Intelligence Section related:

  “In the evening of September 13, the Regimental observers established an O.P. [observation post] on the high ground south of Xammes. While occupying this O.P. the observers lived on the fat of the land. An abandoned German commissary in Xammes furnished bread, honey, butter, jam, gold-tipped cigarettes and cigars – from the well-kept German gardens in the vicinity came a variety of vegetables – and crowning all, German beer, wine and schnapps were on tap in former Boche (German) bars (for the ‘dry’ All-Kansas regiment).”

  During the American occupation of Germany in 1919 when the rules regarding consumption of beer and wine had been unofficially loosened, Charles MacArthur, 149th Field Artillery Regiment, related that in his [cannon] battery’s stop in Bittenburg, “we ran into real German beer, a little watery for the famine in grain.”  Another discovery was made in Bittenburg:  eierkuchen, or German waffles.  “With a helmet full of flour and a little corn syrup any hausfrau could produce an elegant set of waffles.”  Evidently, the waffles reached such an esteemed place that “the very name of eierkuchen was transferred to anything that looked appetizing, especially young women.”

  A Captain Biggs related that the clothing worn by German civilians seemed serviceable, but that the “shapeless, heavy shoes” was a noticeable feature.  Much of the material was ersatz [substitute], made of paper products.  Beer was plentiful at 20 to 30 pfennings a glass, but “of a poor grade,” as was the wine.

  As part of the agreement for the occupation of Germany after the signing of the Armistice on November 11, 1918 was one unpopular requirement that all dram shops be closed except during a few hours of the afternoon and early evening.  The sale of any intoxicant except beer and light wines was prohibited.

  A printed announcement of a “Reunion and Smoker” party for the 77th Division’s MP Company on October 25, 1919 at the 77th Division Association Club House in New York City. states that “they will organize an American Legion Post and there will be a keg. Organized by Francis N. Bangs.” Captain Bangs was in the MP Company, 77th Division, AEF.

  A postcard with an inscription, described the outdoor tables in Bourges where the French would gather to drink and socialize, as pictured. Inscription on the back: “the French people like to have this little beer table outside. This is very typical.”

  On a printed card from the YMCA, “The Y.M.C.A accepts no responsibility for money or valuables kept by soldiers during the night. These should be handed for safe keeping to the Leader in charge of the Hut. Overcoats, rifles, or other equipment should be stored in the cloak room. You are urged to leave no articles of clothing or equipment in the cubicle after dressing or about the Hut at any time. By order of the Police, Beer and Spirits must not be brought into the Institute.”

  From the service of Private Walter G. Shaw, 18th Infantry Band, 1st Division. He died at Charpentry in the Argonne in 1918:

  Oct 31, 1917 “I like France fairly Well don’t think I would like to live here always [sic] they have fine roads here. white and red wine can be bought for 1.50F a bottle (30c) some of the soldiers get tanked up on it I don’t like it because it is so sour French people have it with every meal. Champagne can be bought for 9.00F a bottle $1.75 this is extra dry costs about $7.00 in the U.S. Beer costs .30 centimes a bottle 10c….”

 From the service of Corporal Reid Disman Fields, Ordnance Detachment, 13th Field Artillery, AEF:

“Feb. 23/19

Dear Clara:

  No doubt you will be surprised to hear I am going down into Germany. Left Mehnin today 11AM. Am going to the Third army. So far as I know somewhere near Coblenz. So don’t expect I will be back very soon. Tell your mother I will drink her share of beer. Ha! All for the time so Bye Bye, Reid.”

  The roster and menu for Christmas dinner, 1915 from the 133rd Company, US Coastal Artillery Corps, Fort Terry, New York listed that the dinner included oyster stew and crackers, roast turkey, oyster dressing, cranberry sauce, mashed potatoes, creamed corn, creamed peas, stuffed olives, tomato catsup, celery, pumpkin pie, mince pie, cocoanut layer cake, chocolate cake, bananas, oranges, apples, grapes, figs, cigars, cigarettes, apple cider, and bottled beer.

  From US volunteer truck driver, Ned Henschel, December 8, 1918, Verdun, France:

  “…a rumour floated around that there was beer to found in a neighboring village. Another lieutenant and I walked eight kilometres to investigate – and found that it was all wrong; there wasn’t even Pinard!” Pinard was a red French table wine.

  During the Easter Uprising in Dublin of 1916 of Irish citizens against British rule, the British Illustrated War News of May 10, 1916 reported that British troops took cover behind a barricade of beer barrels.

  One postcard shows a “German concrete cellar used as cooler for beer, in woods, Meuse, France.” A British humorous postcard shows a tent surrounded by flood waters with a downcast soldier poking his head out lamenting “‘Ah! If it were only beer.” A German postcard that a Karl Rosendahl in writing to Frieda Rosendahl of Riemsloh, Germany related: “My dear Freidelchen, We are sitting in the Train with a nice glass of beer and send you greetings.” [translated to English].

  A letter from F. Thunhorst of Riemsloh Germany to Carl Rosendahl, June 3, 1915, related that one of their acquaintances “Old [illegible] is still the same and he just keeps going. The beer still tastes excellent, and he still drinks a few pints daily. He sends his greetings.” [Translated from German to English].

  American Dale E. Girton, Base Hosp. #78 wrote on May 8, 1919,

“Hello Rummy:

  I guess that is a fitting salutation for one who has told me in a – past letter he has started drinking Rum, BEER, Wine & Cognac. How about it? Haven’t heard from you for some time and we are expecting to leave Toul for a port of embarkation at any day now, so I thot [sic] I would write you a word so that if I am quite a while.”

  Beer was universal in WWI. It was used to quench thirst, to enjoy in comradeship, to relax and possibly, to help for a moment, to forget about the horror of war.

  From the Archives of the National WWI Museum and Memorial.

Profiling Software: Used by the Breweries, Cideries, and Distilleries

Cyndi
map seen in an iphone

By: Becky Garrison

As we enter into a new decade, an increasing number of breweries, cideries and distilleries are moving from recording their finances, employee logs and other data from offline pen and pencil accounting methods to online software systems. Here’s a sampling of some of the latest techno-logical developments that are specifically geared towards helping these outfits better manage their businesses.  

ShiftNote

  ShiftNote is an online manager logbook and employee scheduling software. The program, re-leased in 2002, gives owners, managers and employees the ability to communicate in one place. Employees can change their shifts and request time off in a few easy clicks. Then managers can approve or deny these changes and requests.

  The scheduling feature allows users to create and publish schedules and shift notes that can be viewed on any mobile device. Additionally, the manager log book can track key daily sales, re-pair and maintenance schedules, upcoming events and labor stats. As this logbook is entirely cus-tomizable, business owners can add custom categories and stats contingent on their particular needs.

  Help articles, tutorials and free screen share trainings are available for those who need assistance in setting up and using ShiftNote. A major software update slated for 2020 will offer new and enhanced features.

Whiskey Systems Online

  Whiskey Systems Online is a complete production tracking and TTB reporting system tailored to the unique needs of American craft distillers. Launched in 2014, this software offers complete distillery operations tracking, from raw materials to cases shipped out. Features include invento-ry and barrel management, cost of goods sold, manufacturing cost accounting, forecasting and planning, batch tracing, auto-generated TTB monthly reporting and federal excise tax returns, QuickBooks integration, employee task management, TTB audit preparation, success metrics dashboards and much more.

  Whiskey Systems’ propriety hardware interface allows distillers to track the temperature and humidity of their warehouse during a barrel’s entire aging lifecycle. By tying the aging history to their Whiskey Systems barrel inventory, the software can both optimize aging conditions and eliminate manual data entry from a third-party monitoring system.

  In 2020, the company plans on launching a brand new interface to improve the user experience and navigation. The update will include more production planning and forecasting tools and more success metrics and dashboards. As Whiskey Systems is a “subscription as a service,” there are no required downloads, and eve-rything is available via a browser. Users just activate their subscription online for immediate ac-cess. Whiskey Systems has extensive online resources such as training videos and help pages, as well as one-on-one support and set up for no additional charge.

Daruma Tech

  Since 2015, Daruma Tech has been developing mobile loyalty applications for beer guilds. For the more significant guilds and associations, it has a customizable solution that can be tailored to suit their marketing needs. For smaller guilds, the “lite” version can help them get started with their digital loyalty program.

  This loyalty program software rewards consumers for visiting participating locations. App users can keep track of the breweries they’ve been and the places they want to visit next. Users collect stamps at each brewery and claim prizes based on the number of stamps they’ve collected.

  Brewers who participate can access a portal where they manage their content, including location-specific information, beers, events and deals. The app also provides a marketing channel where brewers can communicate directly with their target audience, as well as a social component where users can share their thoughts on different breweries and beers.

  The mobile app is powered by a cloud-based mobile content management system. Participating locations can update the content in real-time through their MCM. There is nothing to maintain, download and install, as it’s also a subscription-based service. A knowledge library where users can access help documents is available online.

  Current guild users of the app are New York State Brewers Association, Ohio Craft Brewers As-sociation, Brewers of Pennsylvania, Massachusetts Brewers Guild, Rhode Island Brewers Guild, Connecticut Brewers Guild and the Washington Beer Commission.

  In 2020, Daruma Tech will begin offering these services for other craft beverages and related craft foods.

KegID

  KegID is a cloud-based asset scanning and tracking application that’s been available to brewers since 2001. The software allows brewers to track how many kegs they currently have in use by providing visibility and insight. This application can create accountability by pinpointing the lo-cation of a barrel, its contents and dwell time.  

  Scanning can be done with a variety of equipment, from Android or iOS mobile devices to fixed in-line scanners. In addition to scanning kegs at the brewery, they can be scanned in the field and marked for special handling if any part of it is found to be damaged or malfunctioning. It can al-so identify kegs that are due for routine maintenance.

  Also, KegID is automatically included on any kegs leased through its lease-to-own solution, KegFleet, at no extra charge. Each brand new European keg comes laser-etched with the scan codes and the ID numbers pre-loaded into the application. They are ready to scan and track upon delivery. 

  In addition to online resources, a team of people located in KegID’s Houston-based office are available to provide personal assistance to new users during business hours.

  The app can also be used to manage other reusable assets like pallets and tap handles.    

Kegshoe

  For the past four years, cideries, breweries, distilleries and other craft beverage producers worldwide have been using Kegshoe tracking software. Using either an iOS or Android app alongside Kegshoe’s barcode stickers, producers can track their keg fleets throughout the entire production, storage and distribution cycle.

  The application then offers insights into the status, location and development of a keg fleet, ensuring that turnover cycles are kept in check and kegs are not being lost. Having the reporting and logging tools available to show the contents, location and details of each barrel allows customers to manage their fleet inventory better.

  To make setup and operation as convenient and affordable as possible, the company eliminated the need for additional hardware. Producers can download the Kegshoe app on their devices and start scanning. Other features include rental customer logging and tracking, and production batch assignment and monitoring 

  Kegshoe is currently in the process of releasing a craft beverage-focused customer relationship management software. The CRM will help to provide an industry-tailored system for sales reps and managers to log and manage their customers, sales cycles and productivity. With both desk-top and mobile functionality, it is meant to make the sales process for craft beverage producers as efficient and affordable as possible.

  All new customers receive a series of onboarding materials, including detailed product tours that walk them through the app and desktop software, as well as a support article library. Additional-ly, Kegshoe offers around-the-clock support, ensuring all issues and questions are addressed promptly and don’t interrupt brewing operations.

Small-Batch Maps

  Released in 2019, Small-Batch Maps is designed to help breweries and distilleries better manage their distribution and sales. The company wants to lessen the challenges of market forecasting by helping producers determine if they should market one product or concentrate on all of their of-ferings.

  The software allows potential customers to search for products on a website, and for beverage companies to gain marketing insights, estimate product needs and discover new distri-bution regions. Producers can then use this data to market the products most in-demand, or those with less traction.

  Breweries and distilleries can easily add Small-Batch Maps to their websites and other online properties. Once they’ve added the feature, they can head over to their website, log in, and add new locations as their distribution networks grow.

MAN VERSUS MACHINE: Options in the World of End-of-Line Packaging

Cyndi
man operating package machine

By: Cheryl Gray

Quality, efficiency and speed are but a few of the attributes assigned to best practices when it comes to end-of-line packaging.  Craft breweries and distilleries that make the change from manual to automatic or, in some cases, combine the best of both worlds, have a universal goal: to produce an attractively packaged and cost-effective end product that draws in consumers and keeps them coming back.

  When it comes to automation for end-of-line packaging, the best companies listen to the needs of craft brewers and distillers, rather than drive them to a product that won’t benefit their bottom line. Such is the case with WestRock of Atlanta, Georgia, which touts itself as the only company in the paper packaging industry with in-house machinery manufacturing teams designing full lines of automatic packaging systems. WestRock considers itself a leader in innovation and sustainable packaging practices. David Hayslette is WestRock’s Senior Director of Business Development for Craft Beverages.

  “Customers come to us because we create customized, sustainable and value-added solutions using the world’s most comprehensive portfolio of paper and packaging products,” says Hayslette. “Customers appreciate our partnership approach. They know that when they work with WestRock on a total automated solution, they have a single point of contact for paperboard, corrugated and machinery solutions that work together.”

  Hayslette points out that for many craft breweries and distilleries, automation comes into play when growth demands something beyond what a manual operation can handle.

  “Typically, end-of-line packaging automation decisions are driven by upgrades to filling capacity. In other words, if a brewery is filling cans at a rate of 45 cans per minute with a mobile filler and they decide to purchase their own filler with a speed of 100 cans per minute, they will likely not be able to keep up with the speed using labor, or their costs will increase prohibitively. Instead, with the investment in the faster filler, they also become interested in automated packaging to address their objectives.”

  There is a delicate balance, Hayslette says, between reducing costs for labor and materials, while working to maximize productivity.  

  “Automation brings a level of consistency in the packing process by the way cartons are erected and glued versus the manual approach, which can be subject to human variance. In a tight labor market like we have in the U.S., finding laborers to hand-pack cartons can be challenging, and the hourly pay rate is increasing in some jurisdictions. Automation also brings the ability to pack out more product in the same period. Manual packaging works best when there is no bottleneck created to the production process; there is readily available labor; and the rate of pay is reasonable, such that the total cost of packaging is reasonable. “

  Hayslette stresses that WestRock works with clients to help ease the burden of financing the capital investment costs tied to purchasing machinery for end-of-line packaging. He points to return-on-investment as one key consideration for breweries and distilleries thinking of buying automated packaging systems.

  “We encourage customers to think about their total cost of ownership and do a side-by-side analysis of the manual versus automated process. A manual process typically carries with it the cost of labor, a cost associated with the packaging materials to be used and a productivity rate. This would be compared to the automated option, which would typically reduce labor, reduce materials costs and increase productivity rates. However, there is the added investment in the machinery itself.”

  Minnesota-based and employee-owned Douglas Machine sold its first automation product in the 1960s to none other than the Curtiss Candy Company, makers of iconic candy bars that include Baby Ruth and Butterfinger. More than 50 years later, Douglas provides a vast array of what it describes as cutting-edge machinery for cartoning, case packing, as well as tray and shrink wrapping.

  Todd Welker, Beverage Sales Manager for Douglas, says top producers in brewing—both craft and legacy—along with distilled spirits, come to Douglas for their packaging machinery needs. The company, Welker says, designs and builds exclusively servo platforms in its Minnesota factory.  All come with nationwide sales and service support, backed by a three-year warranty and a parts price guarantee.

  “Typically, our customers come to us when either their speeds increase beyond their current low-end machinery, or when they are planning ahead to accommodate future outputs,” said Welker. “It is our clients who make the decision to automate based on labor costs, labor availability and safety of their personnel. Reducing labor or the concerns of safety due to manual processes generally drives automation, in addition to increasing line speeds, which reduces labor economies.”

  Welker says that switching from manual to automated end-of-line packaging takes output to new levels.

  “Manual packaging is extremely flexible. The human hand can do a number of things that are difficult with automation. Still, automation of packaging is by far more cost-effective, and it can reduce or eliminate repetitive motion injuries where one injury can potentially cost more than a fully automated line.  Automated packaging can also run much faster than manual work, thus increasing line speeds, reducing labor and driving up efficiencies.”

Welker says that his brewery clients work with a variety of end-of-line packaging options.

  “The carton and tray are the most accepted packages in the brewing industry when cans are run. Bottles are often run on older case erectors, drop packs and case closers, but more breweries are looking to eliminate the box-shop and utilize all-in-one wraparound case packing technologies. These greatly reduce footprint, labor, case costs, and can even potentially eliminate partitions in the cases for even more material savings.”

  However, for some craft beverage makers, the dollar investment of automated end-of-line packaging can be daunting. Meghann Quinn, co-owner of Bale Breaker Brewing Company in Yakima, Washington, says her brewery’s end-of-line packaging is all done by hand. 

  “We manually put the six-packs into the cases and palletize them.  We do both of those manually because end-of-line automated packaging systems are too expensive, and our speed doesn’t necessitate them.”

  Some breweries and distilleries deploy manual labor as a way to test the market to learn what are the best pack sizes and styles. Once the decision is made on what works and what doesn’t, many producers turn to automation to quickly get their products to customers.

Best of Both Worlds

  The marketplace had to wait nearly a century before Nelson’s Green Brier Distillery, founded in the 1800s in Nashville, Tennessee, was resurrected by brothers Andy and Charles Nelson. The Nelson brothers worked to restore the landmark distillery built by their great-great-great-grandfather, Charles Nelson, and with it, a brand that many consider highly responsible for putting Tennessee whiskey on the map worldwide before Prohibition dried up production.

  Fast forward to the 21st Century, when the Nelson brothers have embraced many aspects of automation in their end-of-line packaging. However, just as they managed to re-create the family’s original whiskey recipe through meticulous, hands-on research, Andy Nelson says the distillery is just as careful not to abandon many of the manual end-of-line packaging techniques that make Green Brier’s products unique. A combination of automated and manual systems, Nelson believes, brings together the best of both worlds.

  “We have been utilizing both for quite some time,” Nelson says. “If you have all or mostly automated equipment, it’s important to have a good tech on hand to help when things inevitably go wrong.  And, with manual or semi-auto equipment, it’s necessary to have a staff that is attentive and detail-oriented.  It’s all about quality and efficiency!” 

  Sourcing suppliers for end-of-line packaging needs is as careful a process as deciding what products to order. Nelson says that his distillery relies upon a variety of options.

  “We’ve used a handful of methods, ranging from brokers to OEM directly. It can depend on how much I know about each item and how much I trust others to help me select equipment and coordinate maintenance.”

  For those embracing automation on any level, the opportunities are endless. While manual packaging renders what only a human approach can offer, automation addresses the future, boosting production and the bottom line.

Innovative Bottling Systems Allow Craft Brewers to Adjust to Trends

Cyndi
staff showing brewing machine

By: Gerald Dlubala

While tastes for craft beer are as individual as each customer that walks into your tasting room, the reasons to package your craft beer in a bottle remain consistent whether manually capping a few bottles or running a high-speed bottling machine around the clock. You want that bottle of beer to retain its quality, compete with other breweries for on-shelf presence and present a consistent product to those consumers who look to packaged beer as their primary selection.

Flexibility And Versatility Are Key

“In a crazy industry like craft brewing, versatility and the ability to react to and meet changes are key. That includes your packaging system,” said Dan Komarony, President of DK Advanced Technologies, manufacturer of the MicroBottler filling machine. “When looking to purchase a packaging system, craft brewers should be aware of their projected volume, available floor space and the potential effects that adding additional equipment will have on their workflow. Most machines offer a sanitizer or pre-sanitizer and a filling and rinse function, but can they do it within the footprint that you can offer? Can they transition from canning to bottling across any product you offer without significant downtime during changeover?”

  “Breweries need to follow the trend of what their customers want, not what their equipment forces them to do,” said Doug Ernenwein, Sales Manager for DK Advanced Technologies. “Most new craft brewers operate on a small budget, but they still want and need the ability to get in on new trends without having to spend thousands of dollars on a new setup. One minute, cans are popular, next it’s bottled, then it’s specific closures to match the different styles of beer that they brew, so versatility is essential. A packaging system should support all sizes of bottles or cans and offer smooth bottling or canning transfers with minimal setup, configuration and maintenance requirements.”

  That’s why the team at DK Advanced Technologies is passionate about their MicroBottler system. Having initially built the MicroBottler for their private use and using it for three years before making it available to the public, they know it fills the needs for craft breweries requiring up to a 600 bottle per hour system. It’s on wheels for easy maneuverability and compact enough to maneuver through a standard doorframe. To get up and running, you need an operator, a standard 110-volt power supply and access to compressed air and CO2 supplies. Without changing the original footprint of the machine, operators can use modular options to fill bottles ranging from six to twenty-five ounces with enclosures ranging from corking, caging, capping, screw tops, or anything in between. The MicroBottler bottles carbonated or non-carbonated beverages directly from your bright tank, keg or vat, easily changing midstream if you want to package a batch of your craft beer in multiple ways.

  “The machine is built and engineered in-house to your specifications at our New York facility,” said Scott Lufkin, Engineer at DK Advanced Technologies. “Right out of the box, it’s fundamentally set up and assembled containing additional spare parts to replace those that are most needed or misplaced to minimize downtime. Parts that wear the most like O-rings and gaskets are standard, off the shelf components that the buyer can obtain directly from the manufacturer, saving time and money.”

  Technical support is always important when purchasing new machinery, and it’s also a major component of controlling downtime. When it’s needed, it’s usually needed right now.

  “Ours is unmatched,” said Jordan Wood, Technician at DK Advanced Technologies. “Every purchase includes a full machine manual and a short, eight-and-a-half-minute video to help complete your setup. For additional support, you’ll get our company phone number that a live person will answer, along with my number, and our engineer’s number. We are open to conversations by text, message, conference call, email and face time. We take the time to solve your problem, 24 hours a day. Our machines are very user-friendly, with setup and system changes able to be accomplished with only five tools to match the packaging job at hand.”

Specialty Brews And Bottles Are The Perfect Combo

  “We’re seeing bottles used mostly for specialized packaging,” said Andrew Ferguson, Product Manager for Wild Goose Canning – Meheen Manufacturing in Louisville, Colorado. “The need is still there. Craft brewers have to compete with national and international beers for shelf space. It’s sometimes easier to get that space in the warm storage areas using the popular 22 to 24-ounce bottles. Both glass and alumapak bottles are a great choice and work for water, wine, mixed drinks, kombucha and even cannabis mixes. Alumapak bottles are filled on the same bottling machinery as the glass bottles, just requiring a different cap enclosure.”

  Meheen is a bottling technologies company that prides itself on helping craft breweries deliver quality, consistent, packaged craft beer. They have become intensely focused on the filling technology of packaging, working with strategic partners equally focused on the other integral parts of the bottling system to fully outfit breweries to their unique specifications. With the help of these strategic partners, Meheen provides end to end lines for bottling and packaging.

  “Meheen bottling units are very responsive and easy to use,” said Ferguson. “We’ve traditionally sold two, four or six head fillers as standalone units based on the brewery’s fill rate and bottle format. With our updated bottle filling systems, we now can provide all of those format styles for use on one unified frame, so expenses are kept down by only having to buy the needed filler head.”

  Meheen units are fully integrated technologically for remote connectivity when needed. Ferguson tells Beverage Master Magazine that the filling units are touch screen operated with the ability to save format settings, so once successfully configured they can be retrieved with the touch of the screen.

  “Our tech teams stay on-site through the installation until the users are up to speed on the systems,” said Ferguson. “But should the brewer need help, Meheen technicians can remotely tap into, troubleshoot and run diagnostic tests based on your system’s error codes and current running information to keep downtime to a minimum.”

  “With packaging systems, there is always more innovation regarding the faster and easier transition between bottle formats and sizes,” said Ferguson. “From smaller, manual style bottling through fully automated, high-speed systems, our goal is to hit on all budgets and be a craft brewer’s one-stop-shop for bottling and packaging system acquisition and installation.”

Technology To Bottle Your Passion

  Randy Kingsbury, owner of XpressFill Systems LLC, knows that craft brewers want and need an affordable, well designed, low maintenance filler that will get their craft beer on the shelf. Since 2007, XpressFill Systems has been filling that need with their affordable, long-lasting, easy to use, premium bottle and can filling systems manufactured in America using only the highest quality components available.

  “When looking for a bottling or canning system, read reviews, check with others that are using the system and look for a good warranty with corresponding technical support and parts availability,” said Kingsbury. “For the craft brewer looking to fill up to 400 bottles or 600 cans per hour directly from their keg or brite tank, our XpressFill systems are a perfect choice.”

  The lightweight XpressFill system is a craft brewer’s dream, designed as a plug-and-play tabletop unit that needs only electricity, air and CO2 supplies to start filling bottles or cans using either a two or four head filler. XpressFill systems are sold worldwide and are routinely engineered specifically for each customer’s packaging and business needs.

  “We do customizations all the time,” said Kingsbury. “We tweak our machines in house to match brewery specifications whether it’s for different sized bottles or cans, including crowlers. The finishing setup is as easy and straightforward as possible, but we are available by phone to help or just for additional information. There are also YouTube videos, photos and manuals available. Honestly, the hardest part of the setup is finding your beer’s unique balance regarding the pressures that it can handle. You have to know your beers and how much pressure they need and can tolerate for proper filling. That balance is always dependent on the product, the environment, working conditions and bottling temperatures. It’s different in every situation.”

  Kingsbury tells Beverage Master Magazine that they are always working on simplifying the methods needed to verify and maintain proper filling measurements, including improvements in weighing systems. “It’s easy to see the filler results while bottling because you can see through the glass,” said Kingsbury. “But when canning your beer, it’s not so easy. You have to rely on your measuring systems and physical checks after the product is packaged.”

  “Craft brewers are usually budget and space-oriented, so you should start small and step up as needed,” said Kingsbury. “Recognize your place in your local craft brewing industry and proceed accordingly. You may have really big plans for the future, and that’s great, but it’s always best to manage your money wisely and cautiously. Design your system conservatively by focusing on getting an easy to use and maintain bottling or canning system that serves your present needs.”

Reliability, Speed & Innovation

  Krones AG is the world’s leading manufacturer of filling and packaging technology and is commonplace in many global sized breweries. They remain focused on keeping energy consumption low while offering efficient resource utilization. The Krones system can be found in many popular breweries regardless of size.

  “We’ve had our current Krones line for over a decade, and plan on upgrading our packing equipment, cleaning stations and inspecting and conveying operation this upcoming March,” said Dick Leinenkugel, President of Leinenkugel Brewing Company. “Our brewery workers manage, monitor, change or control our processes using available screens and PLC logic. It’s user-friendly with additional access to some functions by smartphone, laptop or tablet when needed. The training is pretty straightforward including both vendor and equipment manufacturer led classroom sessions and on the job training,”

  Leinenkugel told Beverage Master Magazine that although technical support is always important, they use Reliability Centered Maintenance as their approach to defining maintenance tasks and frequency intervals. “We currently run traditional 12-ounce, long neck, no-return bottles at a rate of 475 bottles per minute for both 12 and 24 packs, so we do have consumable or high wear parts readily available,” said Leinenkugel. “Then we use preventive or predictive tools to help us plan repairs or replacement tasks and retain the needed technical support to get those accomplished.”

  “The main thing when looking at bottling systems is to involve your brewery workers upfront in the design function,” said Leinenkugel. “Safety and ease of cleaning are important and welcomed. Look for reliable, simple and robust equipment that is easy to be trained on, use and maintain. Seek out manufacturers that design out waste and overproduction and design in energy efficiency to lower overall operating costs. In the end, your system depends on your unique situation.”

  Abita Brewing Company has used a Krones bottling line for over eight years. They currently run 400 bottles or cans per minute and are planning a new addition using manufacturers Garvey, Omni, PakTech and Switchback to improve efficiency and offer customers more variety in package types. 

  “All of our equipment uses a Human Machine Interface (HMI) to allow operators and maintenance to operate and repair the systems,” said Christopher Bradley, Sr Packaging and Automation Manager, Abita Brewing Company. “They are Automation PC powered touchscreens working with other Programmable Logic Controllers (PLC’s) and safety systems. A Line Data System (LDS) monitors our system via an internal network and server, providing real-time data to help us look for efficiency gaps or machine issues.”

  Bradley tells Beverage Master Magazine that while they have the ability, they don’t allow remote operation of their systems due to the risks and dangers involved. And because obtaining parts can sometimes be a challenge, they stock many replacement parts to prevent large periods of downtime. There is additional support available from their OEM and other outside sources.

  “Innovations allowing for speed and efficiency improvements are coming at a fast pace in this industry,” said Bradley. “Bottling systems are tailor-made for the needs of the customer. When designing your system, use an experienced firm to make determinations on present and future needs. Pay close attention to details. Things that may be simple to implement during the design phase can cost several times that amount if done post-production. Everything from the placement of a light fixture or a convenience outlet could save years’ worth of headaches and expenses.”

  With the 2009 acquisition of Kosme, an Italian based producer and developer of packaging and filling lines for lower output beverage industries, the Krones technology became more accessible to the craft beer industry.

  Brad Branco is the Packaging Manager at O’Fallon Brewery, a regional craft brewery in Maryland Heights, Missouri. They’ve used a Krones Kosme bottling line for about five years, including a depalletizer, a pressure-sensitive labeling system, a rotary filler head and rinser. It was in place when Branco joined the company, and definitely allows room for growth.

  “Honestly, it’s oversized for us right now, but it’s a very good machine, and I’ll always take faster processes over slower,” said Branco. “We use a 28 head rotary filler with a max speed of 9000 bottles per hour, which equates to about 150 bottles per minute or about 25 barrels per hour if speaking in volume. We can empty a 100-gallon brite tank in four to five hours.”

  The Kosme system is windows based and can be manipulated remotely, but Branco tells Beverage Master Magazine that at their facility, there is always an operator on-site, negating any need for remote operation.

  “The Kosme bottling and packaging system is Italian made, which brings with it a learning curve,” said Branco. “Initially it was a bit of a language struggle with the tech support being all Italian speaking. It was a challenge if you needed a proprietary part or something non-standard. We’re good now, and there’s a parts distributor in Wisconsin that carries the most common parts. But Google translate was our best friend for quite some time. You can still have an issue and have to wait for something, but through technical support and speaking with other breweries that have the same equipment, we’ve learned the best replacement parts to keep on hand. It’s all about planning. All in all, this is a great filler that doesn’t lend itself to failure. It’s all metric, with blocks and modules that are easily and fully accessible. In that sense, it’s what I consider a simple machine.”

Niagara-on-the-Lake: Canada’s Growing Beer and Wine Destination

Cyndi
outside of a bar

By: Alyssa Andres

Over the past few decades, Niagara-on-the-Lake, Ontario, has become known as one of Canada’s premier destinations for wine. The historical region of Canada sees thousands of tourists each year who come to experience the tastes of Niagara. While there is no shortage of spectacular wine tasting to be done in Niagara-on-the-Lake, the newest phenomenon to hit the area is the craft beer movement. As tourists continue to flock to the area each year, thirsty for the latest and greatest in food and beverage, local breweries have become a spectacle of their own. Now beer lovers can visit the region for a tour of the local craft brewery scene. On these tours, brewers are offering an array of small-batch beers that you are unlikely to encounter anywhere else.

  One of Canada’s oldest towns, Niagara-on-the-Lake was established in 1792. Located where the Niagara River meets Lake Ontario, the region experiences more mild winter temperatures than its neighboring cities and a much longer growing season. Local families have farmed the land for generations, and, for over two hundred years, the town has been home to extensive fields of fruit trees and grapevines. Only in the past decade have tourists, who already flocked to the area for a glimpse of the world-famous Niagara Falls, started to recognize nearby Niagara-on-the-Lake as another must-see destination. Now, a bustling tourism industry has begun to take form in the little town.

  Straying from the large scale, big batch production of modern-day brewers, Niagara-on-the-Lake breweries are producing small-batch, handcrafted beer, which allows them to experiment more with their unique personality and flair. Focusing on natural and more traditional production methods, Niagara craft brewers are taking us back to the roots of the region. The breweries tend to focus on seasonal ingredients, traditional brewing methods and sustainable business.

When it comes to style, the region knows no bounds, producing styles ranging from classic and traditional to completely out of the box. Better yet, most tasting rooms offer an array of rotating taps that change regularly, so you can sample an Eisbock made with skins from icewine grapes on one day and a milk and cookies porter made with actual chocolate chip cookies on another. This rotation keeps tourists and locals on the lookout for the latest and greatest of Niagara beers.

Setting a Path

  The first craft breweries started opening up in Niagara-on-the-Lake in 2011, back when the tourism industry was still growing. The Niagara Oast House was one of the first craft breweries to open their doors to the public. Since then, they have become a hub in the community and a prized destination for tourists.

Set inside a historic barn built in the 1800s, Oast House creates seasonally inspired beers using on-site well water. Upstairs, the barn has been converted into a German-style bierhall that overlooks fields of grapevines and hosts events of up to 80 people. In the back of the brewery, Oast House has an incredible patio complete with an outdoor bar and a stage set atop a farm truck for live performances. S

Staples like the Oast House Barnraiser Country Ale and Pitchfork Porter can be found across Canada, and new, innovative beers are being released constantly. You will find an array of unique offerings, such as their Oast House Verjus Sour, the first of its kind, made from pressing under-ripe pinot noir grapes and combining them with three different malts and a unique yeast strain created in-house.

That’s just one example of Oast House’s original recipes. The brewery is continually concocting new and innovative methods of production, releasing new beers regularly. They are a must-visit when touring Niagara’s craft breweries. When visiting, be sure to enjoy the offerings of the brewery’s restaurant, Brushfire Smokehouse. Their menu is well known to be some of the best BBQ in the area.

  The other brewery that paved the way for craft beer in Niagara-on-the-Lake is Silversmith Brewing Company, which poured its first beers in 2012. Silversmith Brewing is housed in an old Anglican Church built in 1884 that’s been transformed into a brewery and restaurant space complete with vaulted ceilings and incredible stained-glass windows. It also boasts live music and community events. The brewery’s signature Black Lager has been the star of the show since the brewery first opened its doors. Their traditional Schwarzbier is a local favorite with notes of coffee and chocolate on the nose and a smooth, crisp finish. It is a must-try when doing a beer tasting in the area. 

  This year brings on an expansion for the Silversmith Brewing Company, an indication of its continued success. The brewery has been working hard to complete renovations on a new event space and larger brewing facility, set to open this year.

Creating a Legacy

  These two businesses made way for others, and, since the early part of the decade, Niagara-on-the-Lake has seen close to a dozen new craft breweries open their doors to rave reviews. Bench Brewing Company is one of the newer craft breweries in the Niagara region that is especially thriving. They are taking the idea of local and bringing it to a whole new level.

Located in the Twenty Valley, also known as “The Bench,” Bench Brewing Company sits in the heart of Niagara fruit and wine country. Surrounded by orchards and vineyards boasting everything from cherries to peaches, this craft brewery decided to embrace its landscape and create beers centered around the local produce that so abundantly surrounds it. Here, they use everything from elderflowers to spruce tips to craft an award-winning line of beers.

  Bench Brewing not only ages their beers in French Oak foeders previously used to house Chardonnay and Pinot Noir, but they even age their beer on the skins of the grapes themselves. Their Folklore Dark Sour Ale is aged on Cabernet Franc skins taken locally from the Twenty Valley. The sour ale earned Canada’s country winner in the Experimental category at the 2019 World Beer Awards, an annual competition that sees thousands of beers from all over the world.

Bench Brewing placed in several competition categories, including awards for their Clean Slate Pale Ale and their Plum Grove Sour Ale. Acknowledgments like these help to support the region’s growth and development as well as the international reputation of Canadian craft beer.

  As the region’s wine and beer industry continues to grow, the local Niagara College has developed programs to support the education of skilled workers in the industry. The college now offers several full-time programs on winemaking, brewing and distilling. Niagara College Teaching Brewery is honing in on the next generation of Niagara brewers, who will continue the tradition of craft brewing in Niagara. The two-year Brewmaster and Brewery Operations Management program started in 2010 and has since seen over 150 brewers graduate with almost 100% employment rate. The college works to drive a growing number of young people to the area who will be the next leaders in the industry and help build more local businesses.

  The teaching brewery has an impressive facility with an on-site hop yard and the capabilities of producing 1000L of beer at a time. Students cover everything from brewing and evaluating beer to packaging and selling it. The college also sells the beer to the public at its tasting room. The line of beer is fittingly named Beer 101, and each can has a label that comes with a lesson on the corresponding style of beer.

The label includes the flavor profile of each beer, its history, ingredients and proper food pairings. Beers from lagers and IPAs to Saisons and sours are available for tasting and purchase in the retail store. You can also find them at several bars and restaurants in the area.  

From a little farm town to a bustling tourist hub, Niagara-on-the-Lake and the surrounding region has come a long way from its humble beginnings. Now home to almost 100 wineries and nearly a dozen craft breweries, Niagara-on-the-Lake has an opportunity to change the way people think of Canadian food and beverage.

Through standing by traditional values, practicing sustainable approaches to business and putting out diverse, quality products, the town continues to nurture and perfect the art of craft brewing and winemaking. Whether you’re a wine lover or you prefer the tastes of a quality craft brew, mark Niagara-on-the-Lake down on your list of the next must-see travel destinations

New & Notable in Canada: Crickets, Craft Beer Superfans and a New Seal of Authenticity for Craft Breweries

Cyndi
beer surrounded with roaches

By: Briana Tomkinson

At the end of 2019, Canada reached a new milestone with over 1000 craft breweries and brewpubs in operation from coast-to-coast. Not surprisingly, the year also saw the launch of a new national federation of craft brewers associations to lobby the federal government on na-tional policies that affect the industry.

  Here’s a summary of some of the notable news and craft beer trends in Canada right now, in-cluding insights into craft beer consumer preferences from British Columbia, and more on the new Canadian Craft Brewers Association. But first, we’ve got to share news about a truly ex-perimental new brew produced in la belle province …

Cricket Stout Anyone?

  There’s nothing new about novelty brews, but a unique stout produced by a pair of Quebec microbreweries is sure to get folks chirping.

  Just as the name implies, the Stout aux Grillons, a collaboration between La Baleine Endiablée and the Lion Bleu, gets its thick mouthfeel and foamy texture from the addition of thousands of roasted … crickets …

  Crickets and mealworms, which are more environmentally sustainable to farm than meat and very nutritious, are beginning to appear in insect protein products on supermarket shelves, everything from pasta to dog biscuits. Loblaws, one of Canada’s largest grocery chains, even began selling its own line of cricket powder in 2018. Yet, for many people, the thought of eat-ing the stuff triggers an instinctive shiver of revulsion.

  According to CBC News, Baleine Endiablée co-founder, Jérémie Tremblay, got the idea to brew the buggy beer after being challenged by his friend Maxime Dionne, a local cricket farmer, to create a taboo-busting beverage that would tempt people to give insect protein a try.

  Tremblay’s first attempts at incorporating crickets were a bust. Cricket flour made the beer too gooey, while whole crickets gave it a funny taste. The trick, he found, was to roast the arthro-pods, which produced a malty flavor. The unusual additive is used in the same way as grain.

  The cricket stout is available at La Baleine Endiablée, located about an hour and a half north-east of Quebec City in Rivière-Ouelle, at the Lion Bleu, in the Saguenay region (two and a half hours due north of Quebec City), as well as through the Lion Bleu’s distribution points throughout the province.

Survey Offers Insights  about Craft Beer Superfans

  A recent survey of craft beer fans in British Columbia offers a number of insights into the be-havior and preferences of highly engaged beer drinkers, from packaging preferences and brewery tourism habits to the impact of cannabis legalization on beer consumption.

  The annual online survey of craft beer drinkers is conducted by Beer Me BC (beermebc.com), a popular Canadian craft beer blog. Not surprisingly, respondents tend to be craft beer enthusi-asts: almost two-thirds of respondents said they had visited 10 or more breweries within the past year, and 70% said they intended to travel more than 100km to visit a brewery in the next year.

  The majority of those surveyed said they drank beer three or more days per week, with 41% imbibing three to five days per week, and 18% drinking almost every day. Only 2% said they drank less beer after the legalization of cannabis, and 1% said legal weed has led them to drink more.

  For these craft beer superfans, the top factors in deciding what beer to purchase were flavor, beer style, brewery brand and reputation. Price and packaging were ranked as significantly less-important factors.

  According to the survey, the top 10 British Columbia craft beer events are:

1.  Vancouver Craft Beer Week (May 29 – June 7, 2020): https://vancouvercraftbeerweek.com/

2.  Great Canadian Beer Festival (2020 date TBA): https://victoriabeersociety.com/great-canadian-beer-fest/

3.  Farmhouse Fest (2020 date TBA): http://farmhousefest.com/

4.  Okanagan Fest of Ale (April 17 & 18, 2020): https://festofale.ca/

5.  Fort Langley Beer & Food Festival (May 16, 2020): https://www.fortlangley.beer/

6.  BC Beer Awards (2020 date TBA): https://www.bcbeerawards.com/

7.  Great Okanagan Beer Festival (May 6-10, 2020): https://gibbonswhistler.com/festivals-events/great-okanagan-beer-festival/

8.  Whistler Village Beer Festival (Sept. 14-20, 2020): https://gibbonswhistler.com/festivals-events/whistler-village-beer-festival/

9.  Clover Valley Beer Festival (Aug. 8, 2020): https://gibbonswhistler.com/festivals-events/clover-valley-beer-festival/

10. Coquitlam Beer Festival (March 7, 2020): https://coquitlambeerfestival.com/

  Over the seven years since the survey was first conducted, results have tracked several nota-ble shifts in British Columbia craft beer consumer trends, including maturing demographics and a swing in preference away from purchasing beer in glass containers. 

  Since the first survey in 2013, Beer Me BC has found the ratio of younger beer drinkers has been shrinking, while the number of respondents over the age of 43 has increased. It indicates that craft beer has staying power, as beer fans continue to choose craft as they get older. Yet it also suggests that fewer Millennials are becoming craft beer fans than Gen-Xers. Beer Me BC notes that trends researchers have found younger adults are drinking less, and are more likely to choose alternative beverages such as ciders and coolers.

  Over the years, the Beer Me BC survey has found the number of beer-drinkers who prefer to buy in bottles and growlers has dropped drastically. In 2013, bottles, bombers and growlers were preferred by the vast majority of consumers, with only 10% preferring cans. Tall cans (greater than 355 mL) weren’t even on the radar back then. Yet today, almost half of respond-ents said they prefer tall cans, and nearly two-thirds said they prefer aluminium cans to glass bottles.

New Seal Identifies “Real” Craft Beer

  Big Beer is increasingly gobbling up small breweries and marketing faux-craft brands, making it harder for consumers to know when the “craft” beer they’re buying is truly an authentic small-batch brew.

  A new initiative by the recently formed Canadian Craft Brewers Association aims to help craft beer fans identify the real stuff through a new certification mark to be added to “real” craft beer labels.

  The Independent Craft Seal of Authenticity, a small icon featuring a stylized hop bud, is intended to differentiate beer brands that are produced and sold by authentic Canadian craft brewers from copycat brands spawned by large beer conglomerates.

  To use the seal, breweries must be members of the CCBA and apply for an annual license. They must also register the use of the seal, and comply with strict usage guidelines.

  The CCBA formed last spring to create a national umbrella organization uniting provincial craft brewers associations, making it easier to educate and lobby the federal government on issues like federal taxation, inter-provincial trade, import/export policy and growth investment, and promote Canadian craft beer nationally and internationally.

  In June 2019, the CCBA tallied the craft breweries and brewpubs operating in each Canadian province and territory. There are now over 1,000 craft breweries or brewpubs operating in Canada, or 27 breweries per million people (the U.S. has 22 per million). Ontario has the most breweries in operation (269), while Quebec has the most brewpubs (68) and also has the most breweries in planning (80) out of all the provinces.

  All members of Canadian provincial craft brewing associations are automatically members of the CCBA. While the definition of a “craft” producer varies slightly from province to province, all members are licensed to produce beer in Canada, produce no more than 400,000 hectoli-tres of beer (the majority produce less than 5,000 hectolitres), and are independently owned (no controlling shareholder is a large beverage alcohol company). 

Keeping Off Flavors Out of Beer

Cyndi

By: Jessica Spengler

When consumers reach out for a craft beer, they have an expectation of how that beer should taste. When an off flavor sneaks in, it can lose the brewery customers and hurt their reputation. Keeping off-flavors out of beer is not as difficult as it may seem, as long as brewers have the tools and know-how to do so.

An off flavor is a defect in beer that does not adhere to the style or ruins its taste. Some of the most common are diacetyl, which takes the form of butter or theater popcorn; oxidation, which comes across as papery; dimethyl sulfide, a sweet corn taste; and acetaldehyde, often taking the shape of green apples.

Causes

Many different factors cause off flavors, but it often boils down to the same basic concept: a fault in the brewing process.

Raw ingredients

To make good beer, you have to start with good raw ingredients. Malt, hops and yeast should be stored correctly; monitored for defects, mold, and pests; and used as fresh as possible. However, it all begins at the source. Brewers should know what to look out for when buying raw ingredients, starting with the vendor.

“[When it comes to] raw ingredients, you have to see who you’re buying it from. Are they reputable suppliers? We buy a lot of malt from the Czech Republic, I’ve been over their twice visiting the malt house and the hop house. One important thing for the brewers is to be auditing their vendors, making sure they know you’re watching, put a face to who they’re shipping ingredients to,” said Scott Hovey, owner and brewmaster at Adelbert’s Brewing in Austin, Texas.

If an ingredient isn’t good on its own, it won’t be good in the beer, so don’t be afraid of sensory analysis, Hovey said. “It’s like going to the supermarket. You should smell it, look at it, check the taste, the flavor. Every bag of malt, I usually pop a couple of grains in my mouth just to see what it tastes like, what it feels like. It’s surveying the quality of the ingredients.”

Water should be free from chlorine, taste fresh, and be clear.

“With water, smelling it and tasting it is as easy and effective as any test. You can have the best yeast, and the best malt, and go through the process, but if your water has chlorine in it, that can ruin the beer,” said Jim Matt, Chief Scientific Officer at Rhinegeist in Cincinnati.

Cory Hebert, brewer at Adelbert’s, agrees. “If you can’t drink your water because it’s so chlorinated, or any number of factors, then it’s definitely not going to be good to brew with. If you brew with chlorinated water, then you’ll get what’s called chlorophenol in the final beer which will leave the beer tasting like you’re drinking a plastic bag or bucket,” he said.

Fermentation

The most common time for off flavors to develop during brewing is fermentation. The reason for this typically comes down to problems with yeast.

“An overwhelming number of off flavors can be created during fermentation,” said Matt. “A lot of the time, people don’t pitch enough yeast, or they pitch too much yeast, and they’ll get off flavors. If the yeast is contaminated with something else, you can definitely get off flavors from it. That’s where you need to use the greatest amount of care. Yeast needs to be handled in an aseptic environment, so we want to make sure that we handle that yeast free from any other contamination.”

The good news is that, often, when yeast is the problem, it’s also the solution. Keeping beer on yeast a little longer, whether in the tank or through a second fermentation in the bottle, will get off flavors like diacetyl out of the end product.

“I’d say that a good 30 to 40 percent of the bad flavors I’ve tasted in beers are just the beer was rushed through the process. They just didn’t give the yeast long enough to work on, or didn’t let it settle long enough. Time would have fixed it,” said Hovey.

Cleaning, Sanitation and Maintenance

As the old saying goes, brewing is 90 percent cleaning, and one of the reasons for that is to keep the beer as clean as possible.

“The number one prerequisite to being a brewer is an obsession about cleaning. It’s true. You’ve got to keep your plant clean,” said Phil Leinhart, Brewmaster and Brewery Operations Manager at Brewery Ommegang in Cooperstown, New York.

Rhinegeist’s Matt agrees and recommends using tools to ensure tanks are thoroughly wiped of contaminants. “Cleaning and sanitation is everything. If a tank is not clean, then by definition it’s not sanitary, so there are several different ways to determine the cleanliness of a tank. My favorite way is a thorough visual inspection, and that’s usually sufficient. We have a device here called an ATP meter. ATP (Adenosine triphosphate) is a compound contained within all living organisms. The brewers will swab a tank looking for ATP, and, if its in there, then the tank is not clean,” he said.

At Rhinegeist they use Peroxyacetic acid to keep their tanks clean, while the crew at Adelbert’s has been known to use a pH swing to purge their brewing vessels.

“Something we do here is cleaning with a high alkaline, and also highly acidic solutions, so we get what you call the pH swing. You use a caustic soda, so you have a very high pH, and then you follow it with acid, so you have very low pH, so then you’re killing pretty much any organic or inorganic compound that would be present,” said Hebert.

Proper, continuous maintenance will keep equipment running well while also ensuring that it won’t harm the beer.

“If your pump is sucking in air because the mechanical seal is bad, it’s gonna cause high oxygen in your beer and your beer is gonna go stale, it becomes oxidized. It’s all related. If you let your equipment get into disrepair, it’s going to affect the product at some point. If refrigerators and cooling aren’t cold enough, you don’t take control of your fermentation temperatures efficiently, and you can’t cool the beer as quickly. It can all eventually affect your beer,” said Ommegang’s Leinhart.

Detecting Off Flavors

There are a multitude of ways to test for off flavors. Breweries equipped with or who employ labs can “plate” samples of beer to test for organisms that may cause the brew to taste off. 

“Plating is [taking] a sample of beer from a tank and putting it on a media where microorganisms are encouraged to grow. Then we put that in an incubator, and we allow things to grow. If we see something growing that shouldn’t be, then we know something’s not right. Plating is a fairly inexpensive, not terribly time consuming, and fairly easy process to do that every brewery, in my opinion, should be doing. It’s pretty easy, and it doesn’t require a lot of technical skill,” said Matt.

More sophisticated technologies can also be implemented by brewery labs, such as a GeneDisc or a headspace gas chromatograph. These technologies require a higher level of skill to use and tend to cost more than many small breweries can afford. However, they aren’t always necessary when testing for off flavors. Nothing beats a good old fashion taste test.

“The analytical capabilities of a brewery can never compensate for the sensory tests that are required in your own sensory taste pallet. The reality is that you can’t go into a laboratory and get a complete understanding of the quality or the consistency of the beer just analytically,” said Christian Riemerschmid Von der Heide, President and CEO of Siebel Institute, the oldest brewery science institution in the United States.

Brewers will typically form a taste panel filled with brewers, servers and salespeople who have been trained to detect and identify specific flavors. Taste panels are used to help determine if an in-process or finished beer has any defects.

Siebel Institute, founded in 1872, offers flavor training kits for this purpose. Brewers can order from over 40 flavors, both wanted and unwanted, to “dose” their beers and hone the palates of their employees. The training has several purposes, most notably to find out who is particularly sensitive to certain smells and tastes, but also to make sure everyone is on the same page.

“You are not only training your people to detect, but also to identify. The difference is ‘Yeah, I can detect that there’s something different, but I cannot name it.’ We need to be able to do both so that everybody uses the same terminology; but also what is important is to know who is better at it than others. Therefore, if somebody that we know is very well trained in diacetyl and can pick it up at lower concentrations, and that person says ‘Yes, I can detect diacetyl,’ then this is the [person] that you pick [to test for it],” said Richard Dube, Director of Online Education at Siebel Institute.

“I would say sensory analysis and the taste panel is at least 50 percent of your quality control. So if 50 percent of your quality control isn’t standardized, using sensory kits, using flavor standards, then it becomes very subjective, and you have a vulnerability,” said Riemerschmid Von der Heide.

Using taste panels is highly recommended by Siebel, which offers on-site classes at their Chicago campus as well as an online curriculum. However, it’s wise to train all employees from the brewmaster to the newest salesperson in case a flavor problem comes about after the beer has reached consumers.

“Outside the plant, not only the brewers but also your sales force needs to be able to respond to a complaint at a bar or wherever that they say, ‘Your beer tastes funny.’ Because they have been trained to identify oxidation or diacetyl or other off flavors, they can pinpoint a little what the problem might be, or further educate the retailer and explain that it is actually part of the flavor profile of this specific beer,” said Dube.

Can off flavors be corrected?

Many off flavors can be corrected once they’re detected. For most, such as diacetyl, acetaldehyde, or sulfuric compound, a few extra days on yeast does the trick. When making certain beers, according to Adelbert’s Hebert, the process may be sped up, if done correctly.

“Many times too, especially back to diacetyl, in lagers and even English Ales, if you’re fermenting at say 68 F, you’ll do what’s called a diacetyl rest. You bring the beer up to 72 F towards the tail end of fermentation to force that yeast to clean up those off flavors and make sure everything gets scrubbed and is nice and neat and ready to drink,” said Hebert.

An unintended sour may work well blended into another beer in the brewery’s sour program. Even in the case of non-sour off flavors, the beer may be successful in a blend.

“When something is not within spec you can rebrand it as something else if the off flavor isn’t too bad. You can blend it. Sometimes we’ll take something that’s just not true to spec, and we’ll take it down in our sour program. Sometimes the secondary organisms can clean up those off flavors,” said Matt.

However, sometimes off flavors are impossible to correct. Butyric acid, often described as “baby sick;” medicinal flavors and hydrogen sulfide (rotten eggs) are examples of off flavors that cannot be corrected, and the batch will be “dumped.” When dumping becomes inevitable, which according to Matt is not that common, don’t let it become a sore point.

“There are times you have to swallow your pride and maybe take a little bit of a hit to keep quality up. Nobody likes dumping beer, but I’d rather dump a batch of beer that is not true to brand than sell it and be subpar and get a bunch of complaints from your customers,” said Matt.

Keeping off flavors out of beer doesn’t have to be complicated. According to our experts, with knowledge, foresight and a little elbow grease, brewers can substantially decrease their chances of bad tasting beer.

“It’s a multi-disciplinary approach. Just knowing your process and knowing where you’re at risk and then controlling those risks. Be knowledgeable of defects and how they’re caused, control your process, especially those critical quality control points, and then test both in the lab and with a taste panel so that you know that you’re okay,” said Leinhart.

“Pay attention to your customers and do the absolute best you can cleaning, sanitizing and using the best ingredients possible. Don’t compromise. The cheapest test that you can do is sensory. Taste everything. Let that guide you to making a quality product.”

“Just keep your brewhouse clean, make sure your ingredients are fresh, keep your yeast happy, and know your process, and you should be 95 percent of the way there,” said Hebert.

Craft Malt in the Brewery

Cyndi

By: Erik Myers

Bearded brewer in apron holds bag of malt at brewery factor

Recently, the Craft Maltsters Guild – the non-profit association dedicated to promoting the manufacturers it defines as “craft maltsters” – announced The Craft Malt Certified Seal, a new initiative to promote the use of craft malt by breweries. In order to qualify, a beer or spirit must contain at least 10% of its grist, by weight, of malt sourced from one of the Craft Maltsters Guild’s members.

  A craft maltster is defined as a maltster that is independently owned, that produces between five and 10,000 metric tons of malt per year, and that uses grain grown within a 500-mile radius of the malt house for at least half of their grain supply.

The Difficulties of Using Craft Malt

  Craft malt is an industry that is still very much in its infancy. There are very few craft maltsters that have been around for more than a few years, and even those that have been in business for a decade or more are only recently seeing healthy and sustained growth on the wave of a beer industry that favors local goods as a strong marketing standpoint.

  Craft maltster startups have many of the same issues as small brewery startups: Capital intensive equipment, a production process that requires a varied technical background, and a competitive marketplace that’s dominated by a few, large, international players. Craft maltsters have an added layer of complexity of – in many cases – having to educate their suppliers in how to make the products that they need to operate.

  The end result can be, at the worst of times, an inconsistent product: variations in color, moisture content, diastatic power, protein or sugar content, uneven kernel sizes, or inconsistent flavor characteristics, all of which can cause difficulties for a brewery that is engaged in making a consistent product from batch to batch.

  Like any brewery moving through its startup phase into an experienced, scaled production facility, most craft maltsters have grown past these initial challenges to create an even, predictable, product, but the occasional problem may still arise – particularly with an untested supplier or process.

  Other difficulties working with craft maltsters can come from simple supply chain issues. Smaller suppliers with longer lead times and limited on-hand inventory can be challenging to predict when managing a small brewery that is, itself, running a just-in-time inventory process. One hiccup in that supply chain can affect weeks worth of brewing.

  Finally, it’s difficult to ignore that all of the above also comes at a higher price point. While malt from international maltsters can run as low as $0.40/lb before bulk discounts, it’s rare to see a small maltster with the scale available to get a price point anywhere near that, and most are at least double. Those craft maltsters, themselves, are paying an elevated rate for grain from small suppliers who are dedicating a small portion of their farms to malting barley. They do not have the advantage of a scaled, international supply chain for cost benefit to pass along to a brewery customer.

  Using a local craft maltster can often mean paying a premium for a product with uneven consistency and unpredictable supply.

The Advantages of Using Craft Malt

  For all that, there are definite advantages to having a relationship with your local small malt house. 

  Working with a local maltster gives a brewer a whole new palette of flavors and ingredients to work with. In an industry where 7000+ players all use the same basic inputs, a local maltster is an avenue toward differentiation: Each grain does have its own “terroir” that follows through into the end beer, providing a very distinct taste of place. Maltsters that have roasters might offer a lighter or darker Lovibond roast of chocolate, caramel, or Munich-style malts than might be available at a commodity maltster. It allows a brewer that many more variations on ingredients that they can use to create a more distinct array of beers to help differentiate themselves in a crowded market.

  While there may be times that a local maltster can’t deliver as fast as a larger supplier could, they can also be the source of last minute saves and emergency help. Short a couple of bags of base malt on the last brew of the day? Being able to drive over to your local malt house to pick up 150 lbs of grain is a distinct advantage that can definitely save you in a pinch.

  Local maltsters also have – like small breweries – the ability to make weird stuff without taking an enormous financial risk. The capability to malt ancient, heirloom, or alternate grains like triticale, spelt, buckwheat, or corn, sometimes in incredibly small batches, can lead to truly innovative brews that would be otherwise unavailable from larger maltsters.

  From an environmental and sustainability standpoint, it’s undeniable that using a local craft maltster creates a smaller carbon footprint for your operation. Instead of shipping a container across a country or across an ocean, most of that malt originates at a farm within a day’s drive and never really has to move that much farther away, meaning less fuel, lower emissions, less labor, and fewer aggregate resources than it would at a large scale malt house.

Finally, the vast majority of the money paid to that local maltster stays within the local economy in the form of wages as well as payments to their suppliers – local farms and local agriculture. It’s a way that a brewery’s dollars can make a significant and multi-industry impact on the local economy.

But Is It a Marketing Advantage?

  The most challenging part of using malt from a local maltster, however, isn’t ingredient consistency, how to use the ingredients, or any potential supply chain issues. It simply comes down to this:

How Well Can You Tell the Story?

  There is no barrier to entry for a brewery to use a local maltster aside from price. As long as a brewery is willing to pay the premium for the malt, they are an instant user and it behooves them to become an instant evangelist. The added price of malt comes with few immediate end-product advantages itself: A smaller carbon footprint and better support of the local economy isn’t reflected in the taste of the beer, in a better bottom line, or any sort of cost-driven advantage. It’s a marketing point.

  While working with a local maltster on a specific new roast or grain might lead to new recipes, without something truly distinct showing up in the glass, telling the story of local malt is a difficult one because drinking customers, in large, don’t really know what malting is. It falls on the brewery to educate the end consumer as to what a local maltster really is, and how using one positively impacts the environment and the local economy. It also lies on the brewery to show their customer the value of the added cost that local malt brings to beer.

Craft Malt Certified

  Enter the seal of approval: Craft Malt Certified. The seal, created by the Craft Maltsters Guild, is a tool to help breweries and distilleries tell that story to their customers. By creating a seal to go into packaging and the taproom, it creates a conversation piece for customers to engage with. What is craft malt? Why does it matter?

  The odd stumbling block is that rather than creating a freely-available graphic to help breweries raise craft malt’s profile, the Craft Maltsters Guild has put a price on the use of the seal, charging $150 per year to register as a faithful customer – yet another cost, albeit a small one, on top of the premium cost of using the malt in the first place.

  That is the hurdle that still needs to be cleared by craft maltsters and their end users: how to sell the story of increased cost to their customers in a way that makes them care enough to part with their money. Without the additional value proposition, the story of craft malt becomes muddled into the same gnarled discussion of what local means that the entire craft beer industry wrestles with: What does local really mean? How far away does something have to be to no longer be considered local? Is it your local neighborhood, your city, or your state? Is your beer still “local” if it uses malt from another country? What about hops? Will the customer pay a premium for “local” when it increases the cost of the end product to well above regional market norms?

  With the uncertain answers to these questions comes the unfortunate follow-up:

  Why does any but the most enlightened end-customer care?

  The craft malt industry is an exciting new development within the craft beer industry with reflections of what the craft beer industry itself went through 40 years ago. In a modern marketplace focused almost single-mindedly on hops as a key ingredient, it faces a bevy of challenges that it may only get through with the help of its most ardent customers.

Key Finance & Accounting Performance Indicators for Craft Breweries: What Data You Should Be Tracking and How to Leverage it for Success

Cyndi

By: Kelly Addink

Do you have real-time visibility into your financial information?  If so, are you confident you’re monitoring the right type of data to achieve your business goals?  We plan to explore these questions and more as we dive into the issues breweries often face when it comes to financial reporting. We will also take a look at industry best practices and technologies brewers are leveraging in order to spot opportunities, identify risks, set goals, measure progress and adjust their strategy.

Cash is King

  Every business, large or small, depends on cash. However, for many breweries, the focus tends to be more on sales growth than anything else. While sales growth is fundamental to your business, it is equally as important to monitor your cash flow.

  Cash flow is the movement and timing of money into, through and out of your business. In other words, it provides a clear picture of your company’s financial health. A cash flow projection estimates the timing and amounts of cash inflows and outflows over a specific period, usually one year.

  Let’s take a look at some high-level benefits of a cash flow projection:

•   Allows you to anticipate changes versus reacting to changes.

•   Encourages a collaborative working environment between operations personnel, management and owners.

•   Fosters “bigger picture” thinking.

•   Enables you to run different scenarios such as:

  • a.  Impact of cash collection practices and terms (when and how)
  • b.  Impact of accounts payable terms and discounts (when and how)
  • c.   Cash flow for an event
  • d.  Adding a new revenue source
  • e.  Leasing or building a new brewery or taproom
  • f.   Debt restructuring

•   Can ease the burden of sudden and significant changes.

  The first step to creating a cash flow projection is to define your approach and assumptions. For example, you may want to evaluate the financial impact of adding a new seasonal brew. A few key questions to ask are:

  How much will I expect my revenue and expenses to increase?

  Will I need to tap into my line of credit or find additional financing as I start up?

Next You Will Need To:

•    Obtain historical revenues, expenses and cash flow for last two to three years.

•    Develop a template to forecast one year into the future.

•    Review historical growth and forecast growth based on discussions with management.

•    Prepare a formal report outlining the significant assumptions and the forecast results.

  • a.   Key assumptions
  • b.   Increase operating revenue
  • c.   Increase operating expenses
  • d.   Capital additions: production or brewing equipment, delivery trucks
  • e.   Debt service / borrowings
  • f.    Cash reserves

    To make sure your projection stays accurate throughout the year, consider these variable expenses:

•    Months with three payrolls.

•    Months when insurance premiums are due.

•    Increased estimated taxes due to increased sales.

  A good rule of thumb is to designate an amount equal to 10% of revenues for “other expenses” under uses of cash — so you’ll have some cushion when unforeseen costs arise.

  To keep your projections on track, create a rolling 12-month plan that you update at the end of each month. If you add a new month to the end every time a month is completed, you’ll always have a long-term grasp of your business’s financial health. However, don’t try to project more than 12 months into the future or you’ll end up spending a lot of time trying to predict something with too many variables (prime rate could shoot up, sales could go down dramatically, etc.). 

Cash Flow Projection Example:

  After you define your assumptions and approaches and create your 12-month cash flow, you notice a net cash loss in the first half of the year as highlighted below (shown as 6 months).

projection example 2

  You decide the next step to minimizing your negative cash flow in the first half of the year is to evaluate the impact of producing a new seasonal brew as seen in the projection below:

projection example 2

  Using cash flow projections is a cyclical activity. As months pass, you can compare your monthly cash flow statements to your projections for each month and the numbers should be close. You can get away with a 5% variance but if you start to see large differences from month to month, you should revisit your key assumptions to check for flaws in your logic.

  Even if the actual numbers come in higher than your projections, you should take a close look at your assumptions, because higher returns in the short term could lead to shortfalls later on. For example, if you predict your Oktoberfest brew to have the greatest cash inflow during October and you start distributing it in September, you may run out of product by mid-October. You’ll need to adjust for these unexpected changes as you move forward month to month.

  Once you’ve gotten into the habit of using a cash flow projection, it should give you added control over your cash flow and a better understanding of your brewery’s financial position.

  Beyond cash flow, it is important to understand and consider all of your financials when determining your strategy and planning for the future of your brewery.

  By transforming your finance and accounting data into key performance indicators (KPIs), you become equipped to make intelligent, informed business decisions. Below are examples of relevant KPIs for craft brewers along with items to take into consideration during analysis.

1.  Revenue trends: monthly comparisons year over year and month over month, actual to budget comparisons, revenue by category and/or style, revenue by package type, etc.

  Are sales meeting expectations? Are any seasonal brands selling well enough to go year round? Are there any year round brands that could become seasonal? Are there brands that should be discontinued? Are certain package types selling more than others?

2.  Cost of Goods Sold (COGS)/gross margins: monthly comparisons in total, by brand, by category/style, by package type, actual to budget, etc. – report both in dollars and as a percentage of revenue.

  How are margins trending to expectations? Are there styles that are cost effective to produce with a higher perceived value in the market? Are costs increasing/decreasing due to raw material cost changes? Are there items that may need a price increase? Are there potential efficiencies that can help reduce costs in the brewing process? Should you brew larger batches for better yield? Are your COGS fully loaded with labor, overhead allocations, excise taxes, utilities, insurance, etc.?

3.  Distributor/customer performance: revenue, gross margin, rebate/discount tracking month to month by distributor/customer, actuals vs projections, etc.

  How is each distributor performing compared to projections? Are their margins sufficient to cover rebates, discounts, samples, shared mark-downs, etc.? Are certain geographical regions performing better than others? Where should your inside sales team focus their efforts? Consider additional reporting options that provide visibility of distributor sales to retailer including: on vs off premise sales, sell through turns, etc.

4.   Operating expenses: monthly comparisons year over year and month over month, actual to budget comparisons, etc. – report both in dollars and as a percentage of revenue.

  Investigate areas where expenses are increasing (either in total or as a percentage of sales). Identify areas where there are cost savings opportunities. Variable expenses should fluctuate with sales levels, including staffing costs.

5.   Tasting room and restaurant metrics: Revenues and margins tracked by month year over year, food cost as a percentage of food sales, staffing costs as a percentage of tasting room revenue, daily sales trends, etc.

  Evaluate seasonality trends to determine staffing needs and consider training time needed when hiring new staff for busy season. Monitor food costs to determine if menu price increases are needed. Assess daily sales trends for potential promotions on slower days of the week in order to increase business.

6.   Capacity/efficiency: Production volumes as a percentage of full capacity month over month, direct labor costs as a percentage of revenue, etc.

  Are you at capacity and losing orders? Is it time to increase capacity? Are you consistently under capacity? Possibly consider contract brewing or other ways to fill capacity. Evaluate labor costs to ensure efficient production staffing levels.

  So, now we know what type of data successful brewers are tracking but what technology is needed in order to access that data?

  Introducing new technology to any business is commonly viewed as complicated, timely and costly. However with the rapid expansion of cloud-based technology, there are now a number of applications tailored to meet the needs of small and midsized businesses in any industry.

  Most of us are familiar with the phrase “moving to the cloud” but, what does that really mean? In its most simple form, cloud computing is the use of a shared resource on the internet to store, manage and process data. Unlike the historical way of hosting a technology platform on your own server, cloud-based technology allows unique users to access the same software application from any device, anywhere, at any time. Information is easily updated and shared between team members without the need to manually input reports or be in the same physical location. Cloud applications are also being built with an open-interface approach which allows for more seamless integration amongst individual solutions.

  Business processes that are commonly handled in the cloud include:

•   Accounting and General Ledger Management- Such as: Sage Intacct, QuickBooks Online

•   Accounts Payable- Such as: Bill.com

•   Expense Management -Such as: Expensify, Nexonia

•   Inventory Management- Such as: Ekos, OrchastratedBEER

  How leveraging those tools can provide data-driven insights while saving you time and money:

Real-Time Data and Reporting:

  Because cloud-based technology can be accessed from anytime, anywhere, the data really is “at your fingertips”. This accessibility is becoming increasingly important as the competitive landscape continues to intensify in the craft beverage space. The ability to integrate your existing applications with multiple cloud solutions allows for a comprehensive view of your data (i.e. sales, operations and finance) and thus, enables you to make timely intelligent business decisions. Plus, you can use these tools to create tailored management dashboards with customized reporting capabilities – so you see what you want to see on a regular basis.

  Taking it one step further, the ability for craft brewers to access data in real time also makes that data more useful in identifying trends, comparing results to industry benchmarks, monitoring key performance indicators and, ultimately, being a better business partner to your distributors and retailers.

Automation and Scalability:

  Most growing craft breweries tend to run lean and have limited personnel resources. In these cases, leveraging innovative technology to streamline finance and accounting functions and reduce the need for manual processes can be very beneficial. For example, cloud-based accounting software typically automates processes by importing transaction data on a real-time basis. The cloud computing model empowers team members to collaborate and share information beyond traditional communication methods – allowing multiple facilities and/or taprooms to co-manage production, raw materials, packaging levels and distribution scheduling.

  Successful craft brewers are growing at an unprecedented rate and the ability to scale on an as-needed basis is one of the biggest advantages of cloud technology. Accelerated business growth typically leads to growing pains and missed opportunities resulting from the mismanagement of more data, infrastructure and customers. The right cloud solution will grow alongside your business to meet market demands and accommodate growth as technology shifts, revenues grow and your business needs evolve.

  Brewers face many challenges in an industry that is becoming less predictable with fewer loyal consumers. Staying a step ahead of your peers in this rapidly changing environment is critical to maintain a competitive advantage and realize long term success. Having real-time visibility into your cash flow, sales and operational data is a key part of that success. This will allow you to determine KPIs that align with your business goals and track them so you can plan for the future. Take advantage of the many cloud-based tools that can help you transform your data and streamline processes so you can get back to what really matters, running your brewery.

About the Author

  Kelly Addink is a Controller in Baker Tilly’s outsourced accounting practice. She has nearly 25 years of experience in providing financial accounting advisory services to companies in a variety of industries. Kelly also worked as a Controller at a craft brewery for more than 6 years. Today she combines her technical skills and industry expertise to deliver customized accounting, finance and operational assistance to Baker Tilly’s craft brewery clients.