Category: Brewery

How Beverage Business Owners Can Achieve Financial Freedom

Cyndi
man enthusiastically jumping on high fist

By: Raj Tulshan, Founder of Loan Mantra

They say money can’t buy happiness, but it can help create peace of mind by alleviating stress in professional life – especially if you’re a business owner! Professional financial freedom means taking control of your finances and amassing enough cash and savings to manage daily operations, handle emergencies, drive growth, expand and maybe even sell the business one day.

  For beverage business owners, knowing that payroll can be met, a second location of your bar or location could be opened, staff and vendors can be paid – and there is still enough money set aside for any emergencies can provide stability. We’re all familiar with certain strip malls or vacant locations where different businesses seem to come and go, unsuccessfully. In contrast, towns and cities are identified by the bars, pubs and restaurants that are landmarks, meeting spots and seen as a local staple in their areas.

  Financial freedom offers a variety of benefits that go beyond financial control. A recent study by Harvard Business School found that having more money reduces intense stress, brings greater control, and leads to higher life satisfaction. Other benefits of financial freedom include improved mental health, better relationships, more opportunities, an elevated lifestyle and greater independence.

  The path to financial freedom. We all want financial freedom so how do you get there?

  Become a business owner. Simply becoming a business owner provides an essential freedom that can’t be explained unless you are one. As countless entrepreneurs attest, many people prefer to work for themselves rather than for someone else because they have more control over their future – and their finances. A Baylor University professor found that despite the challenges of business ownership – including long hours and high stress levels – entrepreneurs report consistently higher rates of happiness vs. people who work for others.

  Create a budget. Develop and stick to a budget. Outline operating income, receipts, expenses, loans, rent/mortgage, insurance, utilities, payroll, supplies, equipment, etc. Carefully track spending to account for every dollar. Negotiate where possible, switch vendors or gain better rates for your phone and cable services. Determine which of your products are the best (and worst) sellers and adjust stock accordingly.

  In addition to tracking budget, there are common questions each business owner should ask themselves to manage their financial health. For instance, do you have outstanding accounts? Do your clients pay on time? Have you spoken with your top clients in the past 90 days? Do you have your documentation prepared in case you need to apply for a loan? Loan Mantra’s financial health checklist is a great tool to monitor ongoing questions that will not only help you track your budget, but your continued success.

  Make it “to go” and be in the know. A report released in June 2023 by the National Restaurant Association found that more than half of millennials (62%) and Gen Z adults (52%) would pick a restaurant for takeout if alcohol beverage options were included. Currently only ¼ of adults order alcohol beverages online due to availability or state legislation, but that is changing leaving room for opportunity. It’s also important to know the upcoming industry trends. For example, that same report states that it reaffirms the associations predictions that local experiences would be this year’s hottest trends – 79% of beer drinkers would participate in a tasting event at a restaurant.

  Establish authentic customer relationships. According to the US Chamber of Commerce nearly everyone has been affected by Covid Fatigue over the past couple of years leaving people emotionally drained and physically worn out. As a result, consumers want their shopping and dining experiences to be easy, convenient and satisfying. Satisfied customers are repeat customers. In addition, customers are looking for a deeper emotional connection and a personalized experience.

  Use digital media. For brands to build and maintain customer loyalty, the digital experience matters but it must not make things more complicated for the consumer. Whether a customer is ordering online or on-site it must be intuitive and easy. People find the new hottest brew, bar or pub on social media so having a presence online is a must. Post images of the business with indoor/outdoor dining space, food and drinks. Post happy hours, specials, trivia nights, special tastings, etc. and publicize them. Encourage satisfied customers to leave reviews. Allow customers to order food or make reservations online. Make services like DoorDash or OpenTable available.

  Be frugal. Consider how business magnate, investor, and philanthropist Warren Buffett purchased a $31,500 home in 1958 and still hasn’t moved out of it, even though his net worth is currently $104 billion. He can obviously afford a bigger, more expensive house, but he’s famously frugal. Conversely, controversial rapper and designer Kanye West is known for his extravagant lifestyle. He lives in a $20 million mansion – and rented Madison Square Garden for a stunt with his clothing line – despite being $53 million in debt. In a bizarre move, he asked Facebook founder Mark Zuckerberg for $1 billion on Twitter.

  This is clearly an extreme example, but it shows how financially responsible Buffet amassed a tremendous fortune and achieved financial freedom, whereas financially irresponsible West spent money he didn’t have, wound up in massive debt, and begged a tech guru for a financial handout on social media. While you’re likely not in the same tax bracket as mega-successful billionaire entrepreneurs, you can learn a few lessons from them. Don’t spend more than you have. And keep your endgame in mind. It may be easier to save money when keeping your eyes on the prize.

  Invest.  Go for a long, slow simmer vs. a quick sear. Most investments are like an Italian grandma’s Sunday sauce – they need to simmer for a long time to be any good. Know that you’ll be in it for the long haul. This won’t be a quick sear type of situation, where your money will be tied up only for a short time. While there’s always some risk and market fluctuations involved in investments, putting some of your available funds toward stocks, bonds, mutual funds, Roth IRAs, 401(k)s and other investment opportunities can help grow your wealth and put you on the path to professional financial freedom. Talk to a financial expert about how to build an investment portfolio and choose the investments that will best fit your specific goals.

  Focus. Focus on factors you control. Over the past few years, we’ve seen headlines about banks collapsing, an impending recession, plummeting stocks, and other doomsday stories about how our financial futures are in crisis. Don’t panic. Everything that’s happening today is just part of the normal economic cycle. There will always be recessions, wars, and fluctuating interest rates. Take a deep breath. Unemployment is down. Banks are protected. There’s been recession chatter for years, and it hasn’t happened. Prices and the stock market will fluctuate over time, which is out of your control. Focus on what you can control on your path to professional financial freedom: creating a budget, saving money, and investing.

  Have an emergency plan.  Create an emergency plan, ensuring that you have enough savings to cover daily and unexpected business expenses. Without adequate funding in place for emergency expenses (the air conditioning breaks, the plumbing isn’t working, the roof leaks), as well as for the inevitable periods of higher spends (e.g. extra products and staffing around the holidays, etc.), you’ll get stuck in a cycle of borrowing to fund necessary operating expenses or to repair what has been damaged, rather than using capital to look ahead to the future.

  Find financial partners.  Who is your banker, attorney and loan officer? Does the banker have a vested interest in your community? What are the financials? Does the bank have good leadership? Do you have an attorney in case you need legal advice, or someone should make a claim against your business? What about a loan officer or provider? If you need assistance with funding to cover the business in a pinch, to handle an expansion or to keep you aware of current government subsidies that you might take advantage of.

  Having the right partners in place before you need them can mean the difference between a quick phone call and financial mayhem. Find a financial team that will be trustworthy, provide insight and are available when needed.

  You should have complete confidence in their knowledge, experience and capabilities. Talk to them about your business financial status and goals and create a financial plan to help you achieve financial freedom and long-term financial health.

  “For business owners, becoming financially free is a desirable – and achievable – goal,” Tulshan explained. “It takes dedication, determination, and consistency, but follow these tips and you will be well on your way to financial independence.”

About the Author

  Neeraj (Raj) Tulshan is the founder and managing partner of Loan Mantra, a one-stop FinTech platform that democratizes the loan process by providing corporate sized services and access to new entrepreneurs, small and medium sized businesses.

Software Options Available for Breweries and Distilleries

Cyndi
woman swiping card in cashier

By: Alyssa L. Ochs

As the craft beverage industry continues to grow, many tech companies are focusing on the needs of breweries and distilleries around the country. There are many benefits to incorporating software into a beverage production business, including reducing human errors, automating repetitive tasks, getting staff organized, harnessing the power of data and ensuring quality control. Software is available for accounting, inventory, packaging, purchasing and scheduling. Breweries and distilleries also use software for sales, quality control and legal compliance. Mobile app software is an option in this industry, as well as all-in-one management software that takes a comprehensive approach and handles various functions. Meanwhile, some producers embrace a more manual process and rely basic spreadsheets and paper recordkeeping.

  So, what are today’s breweries and distilleries using for software, and how are those products working for them? Representatives from two breweries and two distilleries weighed in on this topic and told Beverage Master Magazine about their experiences with software. 

BOSQUE BREWING CO. Albuquerque, New Mexico

  One brewery that Beverage Master connected with on the topic of software is Bosque Brewing Co., which has multiple New Mexico locations in Albuquerque, Bernalillo, Santa Fe and Las Cruces. With a history dating back to 2012, it is one of the largest brewing companies in the state and has grown from a small startup producing 350 barrels the first year to more than 10,000 barrels annually.

Bosque’s production manager Tim Woodward told Beverage Master Magazine that his brewery uses Ekos for inventory and production management. He also uses a few self-built spreadsheets for forecasting, sales and analysis. The brewery handles accounting with separate software not directly tied to Ekos functionality.

  “Bosque has been using Ekos since 2015,” Woodward said. “At the time, it was very affordable and relatively simple to use. The tools in Ekos addressed what we needed most: inventory management. We are able to track inventory, manage orders, invoice sold product, track costs, review pertinent data and oversee production steps with relative ease.”

  But while fully functional, Woodward said he often runs into little “Ekos glitches” that can be frustrating, such as the services being laggy.

  “Cleaner, more functional report systems with intuitive interfaces would be wonderful,” Woodward said. “I pull a lot of data from Ekos on a daily basis, and sometimes manipulating the report parameters to pull accurate data can be cumbersome. Ekos has done a wonderful job developing product planning calendar with drag and drop features, which is very lovely. They have other modules, such as order hub and keg asset tracking, which we do not use or have not found to work with our particular business model but are helpful pieces. Another offering which would be nice is perhaps a more robust server system to support software operation.”

ALVARIUM BEER CO. New Britain, Connecticut

  Nick Palermo, the head brewer of Alvarium Beer Co., told Beverage Master about the software programs his team uses in New Britain, Connecticut. Alvarium launched New Britain’s first microbrewery, founded on the principle of creating an inclusive and communal taproom while revitalizing a historical city.

  On the brewhouse side of things, Alvarium Beer Co. uses Beersmith to fine-tune recipes and DIY templates on Google Sheets for its calendar and brewing schedule, individual brew sheets and inventory of raw materials and packing materials. Alvarium uses Google Drive to store nearly everything related to production, from brew logs to SOP’s, manuals, inventory and supplier contact information.

  “Beersmith is one of the founding tools that many brewers have used in a homebrew or production setting, allowing quick integration and easy ways to edit recipes with something that is fairly familiar and quick to learn,” Palermo said. “We ended up choosing to use Google Sheets and Drive because of the ability for company-wide visibility and editing capabilities.”

  “We are an increasingly growing brewery in Connecticut, and such quick growth over the last couple of years has led to use needing to be able to combat the ebbs and flows of this industry,” he said. “Whether we need to make a quick change to the schedule, edit a recipe from home or have different departments be able to access information without complication, we found our method has been working really well as we expand.”

  “I’d say the biggest challenge we face with our method is the need to manually enter all of our data and make changes in the templates as we see fit,” Palermo said when asked about challenges with Alvarium’s current software. “Lack of auto-entered data does take up a little more time when it comes to keeping track with inventory and can lead to some mistakes.”

  In the future, Palermo would like to see more flexible software plans for different brewery sizes and needs, with costs to match. He said that having a method to integrate software programs more easily into companies with a system in place or smaller staffing structures would also be helpful.

  Cherokee Robbins, the director of sales for Alvarium, told Beverage Master Magazine about software this brewery uses for other purposes.

  Robbins said that Alvarium uses Google Business software, such as Gmail and Google Drive for recordkeeping, Google Sheets for reporting and inventory and Google Docs and Google Calendar for events, appointments and employee schedules. She says these pieces of software are user-friendly, easy to access and meet requirements for digital storage. Alvarium uses Untapped for Business to store information about brewed beers, to allow customers to view beers and check in and to use the menu board to list available products. Robbins said this software is user-friendly and great for keeping track of customer reviews, archiving past beers and helping other businesses find products.

  Alvarium uses Square POS in the taproom for on-premise and online transactions. The team likes this software because it is easy to add, customize and categorize items with an online store that is set up as an extension for customers to shop. However, she has noticed that sometimes items can “disappear” in Square POS, or if they are intentionally hidden, customers can still find them online and order something that is no longer available. After experimenting with various email marketing platforms, the brewery uses Mailchimp for analytics and to monitor communications with its customer base. However, sometimes these emails have ended up in spam folders even after the team has certified and legitimized its domains.

  After interviewing approximately nine different CRM/ERP-related software companies, InSitu hit the four major categories of importance for Alvarium’s sales and distribution team: QBE integration for accounting, inventory management, mileage tracking and logistics for sales routes and customer relations.

“This is a relatively newer software for us, as we started using this in February of this year,” Robbins said. “There is much to learn with all of its functions, but there are times when we may have delayed connectivity issues with its integration to our QBE. Our account representative has been great with staying in communication and finding resolutions for us when we need help, so that is a huge plus. Sometimes support teams with software can be hard to get in touch with when you need something fixed right away.”

  Other types of software the Alvarium team uses include Adobe Illustrator for signage and labels, Canva for business cards and marketing and QuickBooks Desktop Enterprise for accounting and payroll. It uses Prolific as its delivery-routing software to optimize routes for delivery drivers with self-distribution, Eezycloud’s remote desktop for multiple users to access QBE and Workable and Glassdoor for job postings and recruiting.

  When asked what she would like to see in future brewery software offerings, Robbins said, “It would be ideal if all of the platforms we use can be lumped into one software for a brewery our size, especially because we have a hybrid business model with the taproom, self-distribution and now working with a wholesaler. I know there are options like Encompass or Lily Pad available, but those can be pricey and are geared more towards larger distribution networks. I have also heard of a few software platforms that other breweries have worked on creating themselves in the past few years that fit close to what we ideally would need, but there seems to be an important element missing such as integration to QBE, delivery routing software logistics or the CRM portion for our sales force.”

MUDDY RIVER DISTILLERY Belmont, North Carolina

  Caroline Delaney, co-owner and CFO of Muddy River Distillery, told Beverage Master Magazine how her company approaches software in Belmont, North Carolina. Muddy River is the oldest rum distillery in the Carolinas and launched in 2011 with 500 square feet of space in an old textile mill before growing its production from 35 bottles per day to more than 1,200.

  Delaney said that her distillery uses QuickBooks for accounting and payroll and Square for POS and retail sales. She noted that QuickBooks is straightforward for day-to-day accounting, and Square has the lowest credit card processing rates without a monthly fee. She was familiar with QuickBooks from previous companies and says while it can be limiting, the next step up in accounting software is much more expensive, and most offerings require contracts.

  Yet running sales reports with multiple customers, states and distributors can be tricky and lengthy, she said, plus QuickBooks raised its payroll fees this year.

  “It seems like once you are signed up with Whiskey Systems or similar systems, they have all your data and it would be hard to switch back or to another software,” she said. “And the monthly fees are quite a bit higher than POS systems, so that will add up. Since we were pretty limited here in North Carolina, we weren’t able to sell unlimited bottles and cocktails until late 2019. We are under construction on a building where we will actually have a bar and event space, so I am looking into changing payroll and POS systems.”

  Delaney shared that Muddy River Distillery does not use distilling software for federal reports but that her husband, Robbie, developed his own system for that purpose and is still using it with the distillery’s production manager. 

  “I know he has spoken to some of the companies, but has not made the switch because of the monthly fees and not wanting to get into a system and get stuck with them,” she said.

STILL 630 St. Louis, Missouri

  Another spirits producer that shared details about its software usage with us is Still 630, which makes award-winning, handcrafted spirits in downtown St. Louis, Missouri. David Weglarz, the owner and distiller of Still 630, uses as many organic, local ingredients as possible in his spirits, with an old-world double distillation method that captures all the flavors while consistently embracing the adventure of experimentation. 

  Weglarz told Beverage Master Magazine that he uses Google software for his distillery’s spreadsheets and recordkeeping. He chose this option and still likes it because it is free and not localized to just one computer that could be damaged.

  “It allows us to edit simultaneously from different locations, and since it’s not based on one physical computer, it’s more safely guarded against a catastrophic loss,” he said.

  However, Weglarz acknowledged that Google Docs and spreadsheets are not specifically built for distilleries, so challenges have inevitably occurred while using this strategy.

  “It’s just an excel-type format so I had to build my own spreadsheets to make it work correctly,” he said. “But I did that, and now I have my own personal distillery software. It’s certainly not as fancy and sleek as the pre-packaged software solutions, but it works and the price (free) is right!”

  In the future, Weglarz would like to see more cost-effective software options offered in the distillery industry. He says that his distillery is priced out at the moment, something many craft beverage producers can likely relate to.

Conclusions and Opportunities

  Based on our conversations with craft beverage producers across the U.S., a few things stand out about what is working for software and where improvements can be made. In general, craft beverage producers are pleased with user-friendly software that offers multiple applications, features analytics to optimize processes and gives multiple users access to shared data. Affordability is paramount for craft beverage producers, and if software seems too costly, they often settle for free solutions that require more manual entry and monitoring despite the extra labor and risks.

  There is a need and demand for software for small breweries and distilleries with limited budgets and modest distribution networks. Many current solutions cater to large operations and are financially out of reach for smaller and emerging businesses. Integration is important to brewers and distillers, yet many of these businesses feel that they understand their needs better than what any software provider could provide and prefer to take a DIY approach, creating their own internal systems to get the job done internally. Therefore, there are significant opportunities for software companies to focus on the basics and adjust their offerings with tiered options to connect with breweries and distilleries in mutually beneficial ways.

What Beverage Producers Should Know About Hoses and Tubes 

Cyndi
beverage brewing equipment

By: Alyssa L. Ochs

Hoses and tubes are used for various purposes in a craft beverage production setting, including transferring liquids, washing containers and connecting essential pieces of equipment. Over time, this equipment can begin to show signs of wear and tear, or it can cease to be adequate for growing operations during times of expansion.

  Industry experts from companies specializing in these products weigh in on what breweries and distilleries should know about hoses, tubes and related accessories, plus how to choose the right options for your business.

Hoses and Tubes for Breweries

  Breweries benefit from using specific hoses to transfer and mix liquids at various levels and avoid contamination risks. All-in-one brewery hoses can be used to brew multiple beverages and eliminate manual labor tasks from mixing and transferring. Crimped hose fittings, clamps, gaskets, mounting bridges and hose barbs are hose accessories that help clean and maintain brewery vats and barrels.

  The most common materials used in brewery hoses are chlorobutyl, FDA UHMW, PVC, nitrile, silicone, EPDM and Teflon. Chlorobutyl hoses are common in brewery settings because they meet sanitary compliance standards and are ideal for non-oily applications and clean-in-place tasks. Yet it is crucial to ensure that the hoses you use can withstand specific temperature ranges and pressures. A food-grade, temperature-insulated, pressure-rated, 1.5-inch insulated brewer’s hose will accomplish many brewery tasks. But you might also look into highly rated hoses for resistance if they are placed in a high-traffic area where the hose could become kinked, twisted, or crushed. Tubing connects large components in a brewery to send waste products outside the production area.

Hoses and Tubes for Distilleries

  Craft spirit distilleries also use hoses to transfer products safely, hygienically and in a way that ensures excellent taste. Distillery hoses must meet industry sanitary requirements and FDA and USDA certifications. It is beneficial to use hoses specially designed for suctioning and delivering alcohol up to 96 percent.

  Clear tube hoses help ensure quality and cleanliness, and specific distillery hoses are designed to be odorless, so as not to alter the spirits’ taste. A higher working temperature allows for steam sterilization after use. Using hoses with a chlorobutyl or UHMWPE tube and EPDM cover in a distillery setting is common. Distilleries may want to look for kink-proof and compression-resistant hose and tube products to maintain flexibility under cold temperatures.

Alliance Hose & Rubber Co. Offerings

  One company that specializes in this industry is Alliance Hose & Rubber Co., an Elmhurst, Illinois-based company that has been providing construction and industrial supply products since 1932. It serves a variety of industries, including beverage, chemical, transportation and construction, with products that include industrial hoses, flexible tubing, couplings and fittings. Rob Williams, the sales manager for Alliance Hose, told Beverage Master about how craft breweries and distilleries use his company’s products.

  “We currently serve breweries in multiple ways,” Williams said. “One way is custom-cut and coupled hose systems, including a product hose, chemical hose, washdown and tubing to mate with the variety of connection options available, standard and special fittings, pumps and hose reels. Alliance Hose also serves breweries, distilleries and wineries with education on product knowledge and safety in person, at conferences and through webinars and podcasts.”

  He said nearly all Alliance Hose’s beverage products are also used in distilleries.

  “We do focus on the right hose for the distilling process, from front-end mash to the final high-proof product to be transferred,” Williams said. “Distilleries vary on what they like to use best. We just like to share insights and any additional knowledge that will help make their final product the best it can be.”

Kuriyama Offerings

  Another industry leader in industrial hoses, couplings and accessories is Kuriyama of America, Inc., which opened for business in 1968 and is located in Schaumburg, Illinois. The Kuriyama of America group of companies has eight subsidiaries and six distribution centers. It works through numerous distributors to provide thermoplastic, rubber and metal hose products and accessories, including couplings and fittings, for commercial and industrial applications.

  Tim O’Neill, marketing manager for Kuriyama, told Beverage Master Magazine that his company is best known for its high-purity, food-grade Kuri Tec® brand, clear vinyl hose and tubing products within the brewing industry. Most breweries use clear vinyl tubing, and Kuri Tec is a popular choice because it effectively maintains the purity of the materials that  the hose and tubing are made from. He explained that to ensure a high standard of quality and purity, Kuri Tec hose and tubing meet a wide range of safety standards, such as FDA, USDA, 3-A, NSF and USPS Class VI. To ensure compliance with these standards, Kuri Tec makes its own materials to manufacture its hoses and tubing, allowing for complete quality control.

  “An important consideration brewers should keep in mind when purchasing hoses and tubing is to understanding the difference between products that are simply considered ‘food grade’ and ones that are considered “high purity.” Often, brewers will hear the term ‘food grade’ and assume the hose will meet all their needs. However, the term only implies the product meets the basic standards of the FDA CFR 21 for food contact safety. It does not ensure the hose will not impart taste or smell on the ingredients or beer that pass through.”

  O’Neill said that the 3-A Sanitary Hygienic Standard, which originally started as a quality standard for the dairy industry, is quickly gaining acceptance in the brewery industry as the standard of choice to ensure the safety and purity of transferred materials. 

  “The 3-A standard defines additional criteria, such as ensuring low-extraction materials, as well as ensuring cleanability by reducing areas where materials can become stuck, potentially resulting in bacterial growth. Hoses, fittings and assemblies meeting the various 3-A Sanitary Standards have become a requirement at many craft and commercial breweries.”

  More recently, Kuriyama introduced a rubber “vat to vat” transfer hose under the Aflagomma® brand, called “The Brewt™.” In addition to meeting the 3-A standard for rubber purity, the hose provides a more flexible alternative to the heavy rubber hoses commonly used at larger breweries.

  “We found a lot of the smaller breweries were using the same heavy rubber hoses initially designed for larger commercial breweries,” said O’Neill. “The Brewt was designed to exhibit a similar ability to withstand the dragging and high-temperature cleaning to which these hoses are exposed, but to be light and flexible enough to work well in smaller craft breweries that may have space limitations.”

Common Hose Issues Among

Breweries and Distilleries

  Williams from Alliance Hose told Beverage Master Magazine that the most common problems that breweries and distilleries encounter with their hoses all relate to safety. These problems include pressure and temperature issues, trip hazards and finding the proper hose, tube and fitting for a particular application. These problems exist with product, gas and chemical transfers.

  “We address these needs by asking the right questions and recommending the safest option for that particular application,” Williams said. “We are not a click-of-the-mouse and a shopping cart. We ask questions and connect on a personal level with the beverage community. Concern for our customers safety and quality of their product is a high priority.”

Choosing the Right

Hoses and Accessories

  There are certain questions that brewery or distillery owners should ask themselves when buying a new hose. Williams from Alliance Hose uses the acronym STAMPED to get essential information from customers and provide the correct hoses and fittings for the application.

S    (size) What is the hose I.D./O.D. and length needed?

T    (temperature) What is the max fluid temperature inside the tube? What is the external atmosphere temperature?

A    (application) Where and how is the hose or tubing being used? What are the surrounding conditions?

M   (media) What is going through the hose or tube?

P    (pressure) Pressure product is being conveyed?

E    (ends) What fittings are required to make the connection?

D    (delivery) When do you want the hose or tube?

  “If we don’t have all the information we need, we will press in to gather those details as they are important to the hose system and overall brewing process,” Williams said.

  While discussing the topic of craft beverage hoses and tubes with industry experts, we found that there are few, if any, new technologies or innovations for brewers and distillers to be aware of. These are well-established and reliable products that get the job done, but there are differences in product quality and customer service to keep in mind.

  “I recommend talking to a hose professional instead of just relying on e-commerce to provide you what you think you may need,” said Williams from Alliance Hose. “I’m always available to talk product knowledge and especially safety.”

  O’Neill from Kuriyama said that the most important thing a brewery or distillery can do is ensure they have a good local hose supplier they trust to provide them with the right product for their needs.

  “The difference between using the right hose and one not best suited for a particular application can result in premature hose failures, causing lost production time,” O’Neill said. “Having a hose supplier that will understand your particular needs, rather than simply providing whatever hose they happen to have on the shelf, will improve overall operations.”

How to Scorecard Brewery Taproom Performance

Cyndi
Barrista preparing beer

By: Kary Shumway and Andrew Coplon from TaproomSuccess.com

In sports you need a scoreboard to understand if your team is winning or losing. The same holds true for measuring the financial and operational results of your taproom. You need a scorecard to keep track.

  In this article we’ll walk through the steps to create scorecards for your taproom so that you can measure and improve outcomes.  It’s not difficult, and it can transform your taproom financial results.

Let’s start with some basics: What is the point of the scorecard?

  The purpose of a scorecard is to show the goal or goals you most want to accomplish. It can be as flexible as you like. It can present financial or non-financial numbers. It is designed to capture and quantify your most important numbers.

The scorecard should:

1.  Keep the goals front and center every day

2.  Be only one page (or one number) so that it’s easy to see how you’re doing at a glance

3.  Use numbers (key metrics) to communicate

     the goal

First: Measure the Most Important Thing(s)

  Deep inside, we all know what the most important thing really is. Whether it is in our taproom business or in our life, we know what it is. The problem is that we forget.

  The most important thing is remembering the most important thing. The scorecard helps you identify what is most important and remember it every day.

  It is a simple tactic, but very effective if you follow it. The scorecard provides focus on how you’re doing towards what’s most important.

How to Figure Out the Most Important Thing

  If you are struggling to figure out what is most important, try a few focusing questions:

●   What keeps you up at night?

●   What is the biggest opportunity to take advantage of?

●   What is the biggest problem you need to fix?

  Here’s Kary’s story…cash keeps him up at night.  More specifically, running out of cash!

  So, Kary designed a one-page scorecard to monitor our business cash position every day. It shows the bank balances, borrowing balances, upcoming spending and expected receipts. It shows borrowing ability and future cash needed to fund growth. 

  The cash scorecard helps Kary sleep better at night because he’s focusing on the most important thing.

  Figure out what your One Thing is, measure it, and put it on a scorecard. 

The Process to Communicate & Educate

  The scorecard alone won’t achieve the goal. You need to take action to get things done. Often, you need action by your managers and employees – your team. 

  The process below is an effective way to communicate anything you like, and it works well with the taproom scorecard:

1.   Know the Score. To know the score, you have to SHOW the score.  Don’t play hide and seek with your scorecard or bury it in a desk drawer. Share it with those that can help you win.

2.   Educate your Team. Teach your managers and employees how the scorecard works and how they can make a difference. People want to contribute, teach them how.

3.   Set a Goal to Improve. Use your past performance + set a goal to do better.

4.   Monitor the score, track Progress. Provide regular updates or people lose interest.

5.   Celebrate the win. Free beer works well when you hit the goal!

  Taken together, the 5 steps presented above are an effective method to make sure you get the most out of your taproom scorecard and achieve your goals.

Use Process and Outcome Metrics

  We are a results-oriented society. We like to get stuff done.

  However, it is useful to focus on the Process of getting stuff done in addition to the results or the Outcome. The idea here is to use “Process and Outcome Metrics” on the scorecard.

  Process means the action taken, or steps that need to be followed. We can’t always control the outcome, but we can control actions, effort, following a prescribed routine.

  For example: Teach your taproom staff to ask for the sale and offer an item to upsell.

  Teach them to ask for the customer’s email so you can tell them about new beers or special releases. Send out marketing emails and make social media posts on a regular basis. These are things you do to drive sales, increase profits, or achieve the most important thing.

  Outcome means the actual results. The Outcome is a by-product of actions. If you’re not getting the results you want, experiment with the actions.

Consider measuring both Process and Outcome goals on your scorecard. We all measure the result, but sometimes we need to measure (and reward) the process to get there. 

Scorecard Templates

  There are different scorecards for different needs.  For example, if you want to increase taproom sales, the scorecard will show key metrics to achieve that goal.  If you want to improve the customer experience and satisfaction, you can create metrics to support that goal as well.

Below, are three types of taproom scorecards:

1.  Sales Focused Scorecard

2.  Engagement Scorecard

3.  Motivation Scorecard

#1 The Sales Focused Scorecard:  As the name implies, the Sales Focused Scorecard is laser focused on key metrics to support sales.

Typical Key Metrics to support sales:

●   Total Sales $ / by day / week / month

●   Sales by category / product / service

●   Sales per BBL

●   Customers per day / week / month

●   Average ring per customer

The Chart below shows an example of the Sales Focused Scoreboard:

Chart shows an example of the Sales Focused Scoreboard:

  The Actual Month LY (last year) column presents the results from the same month last year. The Trend Month TY (this year) column presents where we are currently, and how sales are trending. The Goal Month TY shows what we want to achieve this month.

  In summary, the scorecard shows the type of metric to measure. It shows where we’ve been (past results), where are now (current results), and where we want to be (the goal).

#2 The Engagement Score:  This scorecard combines similar elements of the Sales Scorecard, but takes a greater focus on how well your staff is building relationships with your guests. Your ability to understand the below engagement metrics can result in improvements on your sales metrics.

Typical Key Metrics to monitor engagement:

●   Tip percentage

●   Flight sales

●   Tab size

●   To go beer sales

  Your team members’ average tip amount correlates directly with their level of engagement. We see the staff member that offers a high level of engagement receive an average tip of 27.1% vs a staff member that offers a low level of engagement only seeing an average tip of 24%.

  While flight sales may not be an obvious sign of engagement, flights are an opportunity for a staff member to educate a guest further about your beers, and brewery. When staff suggest a flight, guests spend an average of 20% more, and also a tip a point higher.

  Additionally, because a staff member providing a higher level of engagement is seeking to build a deeper relationship with their guests, they are by default more likely to include more upsell opportunities in their interactions (i.e. suggested additional beverages, to go beers). This results in not only higher tabs, but also more meaningful connections. These guests are more likely to recommend your brewery to others and return sooner.

#3 The Motivation Scorecard:  This is a staff-specific scorecard. As a manager or brewery owner, the more successful you are at understanding your team’s needs, the better you will be able to motivate them.

When you are able to create successful

strategies to motivate your staff, you will see:

●    Greater passion from your staff

●    Greater teamwork

●    Higher tabs

●    Higher retention

●    Your job becomes easier

●    Greater taproom success

  But what metrics can you monitor to gauge how well you are motivating your team?

Typical Key Metrics to support motivation:

●   Frequency of rewards

●   Frequency of recognition

●   Frequency of team meetings and trainings

●   Growth opportunities

●   Length of employment

  While offering your team fair base pay is where to begin, it is also important to regularly reward your staff for a job well done. Motivation isn’t a one-time to go beer sales content. Motivation is finding a plethora of metrics, many from the lists above, that you can use to track and reward your team’s performance. The number and frequency of reward opportunities will correspond with how well your team is motivated.

  Through conversations with your staff, you will learn that some people are motivated by rewards, while others may be motivated by recognition. Your repertoire should include both physical rewards and recognizing team members who hit specific goals.

  While it is important to regularly reward and recognize your team for desired behaviors, hosting regular meetings and trainings is vital to provide them with the skills for success. These are opportunities for you as a manager or owner to connect with your team. The more your team feels connected, the more motivated they will be to work together for organizational goals.

  Increases in your team’s average duration of employment at your brewery correlates directly to the quality of their experience, and thus how well you are motivating them. Length of employment can also represent you offering staff the opportunity to grow with your company. This could come in the form of offering staff educational/certification opportunities, or providing them the ability to climb in rank at your brewery.

Wrap Up and Action Items

  The taproom scorecard is a powerful tool to help you increase the sales and profitability of your taproom. It measures the most important thing, the most important goal(s), and keeps it in front of your team every day.

  To get started with your taproom scorecard, determine your most important thing. Maybe it’s growing sales, profitability, or customer satisfaction. Whatever is most important, get it on the scorecard, and set a goal to achieve it.

  Engage your team in the game of reaching the goal. To know the score (and win the game) you need to SHOW the score. Don’t play hide and seek with your sweet scorecard. Share it with your team so that they can help reach the taproom goals.

  You’ve got the intel, and you’ve got the taproom, get out there and build an awesome scorecard today.

Breweries Making Hard Cider: Beware a Trap in the Regulations

Cyndi
waiter handing out drinks to guests

By: Brian D. Kaider, Esq.

Breweries are seeing increased demand for alternative products from customers who prefer a beverage other than beer.  Hard ciders are a popular choice both for flavor and because they are typically gluten-free.  However, it is crucial for breweries to familiarize themselves with the specific legal requirements associated with cider production.  In particular, there are three critical characteristics of a cider product that affect how it is regulated: alcohol level, ingredients, and carbonation level.  Moreover, there is an absurd structure to hard cider excise tax rates that results in one popular category of ciders having a dramatically higher tax rate than others.  For those unaware of this distinction, enormous outstanding tax liabilities and penalties could accrue.

Licensing Requirements

  For simplicity’s sake, this article will use the term cider to include both cider made from apples and wine made from pears, i.e., “perry.”  In practice, there are distinctions between these products, particularly when it comes to labeling.

  Some state licensing bodies regulate hard cider as a beer and do not require breweries to obtain any additional licenses or permits to manufacture hard ciders.  The federal Alcohol and Tobacco Tax and Trade Bureau (TTB), however, regulates hard cider as a wine.  Thus, before a brewery may begin manufacturing hard ciders, it must obtain a winery permit.

Alcohol Level

  When it comes to the alcohol level in finished cider products, there are three important numbers to keep in mind: 0.5%, 7.0%, and 8.5% Alc./Vol. (“ABV”).  Any cider product with an ABV in excess of 0.5% falls under the Internal Revenue Code implementing regulations (27 C.F.R. part 24), must be made at a qualified bonded wine premises, and, under the Alcoholic Beverage Labeling Act (“ABLA”), must include the Government Health Warning Statement. 

  Because the Federal Alcohol Administration Act (“FAA Act”) defines wine as having from 7% to 24% alcohol by volume, if a product is between 0.5% and 7.0% ABV, a Certificate of Exemption is needed, rather than a Certificate of Label Approval.  Further, the product is not subject to other FAA Act requirements, such as, advertising, trade practices, labeling proceedings, standards of fill, etc.  Instead, these products must comply with the applicable FDA food labeling and packing requirements, which include ingredient, nutrition, and allergen labeling requirements; though some small businesses are exempt from the nutrition facts requirements.

  Cider products in excess of 7% ABV, however, must comply with all FAA Act requirements, including COLAs and mandatory labeling requirements. (Note: if a product in excess of 7% ABV is not sold in interstate commerce, it can be covered by a Certificate of Exemption rather than a COLA.) 

As discussed more fully below, only ciders with an ABV below 8.5% are eligible for the hard cider tax rate.  Ciders at or above 8.5% ABV are taxed at a wine rate determined by alcohol content and carbonation level.

Ingredients

  It is generally understood that cider is made from the fermented juice of apples and perry from the fermented juice of pears.  But, even the simple addition of sugar above certain levels affects how a product is categorized, labeled, and taxed.  If other fruits are added, there are different classifications depending on whether the fruit is added before fermentation, after fermentation as a flavoring, or the wine of two fruits (e.g., apples and blueberries) are blended after fermentation.

  Taking the simplest case, a product can be labeled simply “cider,” “hard cider,” or “apple cider” if it is produced by the normal alcoholic fermentation of the juice of sound, ripe apples and is derived wholly (except for sugar, water, or added alcohol) from apples.  Even in this case, excess sugar or water can require special labeling (i.e., “specially sweetened cider”), formula approval, and application of a different excise tax rate.

  Any cider product that is made with fruits other than apple or pear or to which spices, flavoring, or coloring materials have been added will require a more descriptive designation, such as cider with natural flavors.  If two kinds of fruit juice (apple and blueberry) are fermented together, the statement of composition must be “apple-blueberry wine” or “blueberry cider.”  This product would not require a formula, because it would still be considered a natural wine.  A cider to which fruit juices, herbs, spices, natural aromatics, natural essences, or other natural flavorings are added after fer-

mentation would be considered a Special Natural Wine, would require a formula approval, and would require a statement of composition such as, “cider with natural blueberry flavors.”  If fermented cider is mixed with another fermented fruit wine, the product would be considered an “other than standard wine,” would require a formula approval, and would be designated as “apple wine – blueberry wine,” “cider – blueberry wine,” or a similar designation.

Carbonation Level

  A cider with a carbon dioxide level of up to 0.392 grams per 100mL is considered a still wine and may be labeled simply as a cider (assuming it meets the other ingredient requirements mentioned above).  If the carbon dioxide level is above 0.392 grams per 100mL, the cider must be designated as “sparkling” if the CO2 results solely from secondary fermentation within a closed container or “carbonated” if the CO2 is artificially injected into the product.  In order to be eligible for the “hard cider” tax rate, the CO2 level must be below 0.64 grams per 100mL.  For reference, a CO2 level of 0.392g/100mL or 0.64g/100mL is roughly equivalent to 1.98 volumes of CO2 and 3.24 volumes of CO2, respectively.

Excise Tax Rates

  Brewery owners are accustomed to a fairly simple federal excise tax assessment.  The first 60,000 barrels per year are assessed at $3.50 per barrel.  The tax rates for cider are not that simple.  In fact, there is an enormous trap in the tax structure that could cause serious problems for breweries that venture into cider production unaware.

  As explained above, the TTB regulates cider as a wine. It is important to note that the wine tax rates are assessed per gallon, not per barrel.  Although considered a wine, the regulations provide a special tax rate for “hard ciders,” of $0.226/gallon.  Like beer, however, there is a tax credit for small producers, reducing the hard cider rate to $0.164/gallon for the first 30,000 gallons.  But, the scope of products that qualify for this tax rate is very narrow.  It includes only products made from apples and/or pears that contain no other fruit product or fruit flavoring, have an ABV of greater than 0.5% and less than 8.5%, and a carbonation level below 0.64g/100mL (about 3.24 volumes of CO2).  Ingredients that impart flavors other than fruit flavors, such as spices, honey, hops, or pumpkins do not make a wine ineligible for the hard cider rate, according to Industry Circular 17-2 (even though pumpkins are fruit).

  If a hard cider product has any fruit other than apples and pears (and pumpkins) or has an ABV of 8.5% or higher, it does not qualify for the “hard cider” rate, and instead falls under the wine tax structure.  If the product has a carbonation level below 0.392g/100mL, it would be considered a still wine.  The tax rate for a still wine, under 16% ABV is $0.07/gallon for the first 30,000 gallons.  If the product has a carbonation level above 0.392g/100mL the first 30,000 gallons would be taxed as a “sparkling wine” at a rate of $2.40/gallon if the carbonation resulted from secondary fermentation in a sealed container, or as an “artificially carbonated wine” at a rate of $2.30/gallon if the carbon dioxide was injected into the product. 

  What may not be immediately apparent is the absurdity of this tax structure.  The following table should put it into perspective.  It shows five different products, their base tax rate, the tax rate per barrel, and the actual federal excise tax applied to a 6-pack of 12oz bottles.

Tax rate table

  Thus, if making a cider product that contains fruit other than apples or pears and that is carbonated above 0.392g/100mL (about 1.98 volumes of CO2), a manufacturer will face a federal excise tax more than 30 times greater than if the carbonation level was below 0.392g/100mL.  Failure to appreciate this distinction and to pay the appropriate tax rate could result in an assessment of stiff penalties and interest and could even result in termination of the manufacturer’s permit.

Conclusion

  Entering the realm of hard cider production requires breweries to navigate a set of regulatory issues that are likely to be unfamiliar.  Beer and cider are treated very differently by the TTB and it is critical to understand the categories that cider products fall into with regard to labelling, formula approvals, and particularly excise tax assessments.  For those considering an expansion into this area, it would be wise to consult with an attorney knowledgeable in these areas to ensure full compliance. 

  Brian Kaider is the principal of KaiderLaw, a law firm with extensive experience in the craft beverage industry. He has represented clients from the smallest of start-up breweries to Fortune 500 corporations in the navigation of licensing and regulatory requirements, drafting and negotiating contracts, prosecuting trademark and patent applications, and complex commercial litigation.

Is Your Brand Something to Talk About?

Cyndi
woman in shocked

By: Hanifa Sekandi

In the overly social world that we now live in, it can be hard to stand out. How does a brand become noteworthy? What makes a brand worth talking about?

  While you diligently craft your new alcoholic beverage, with hopes of becoming a formidable brand, it is important to remember as good as it may taste on the palate, it must also be as memorable to the imbiber. What do people see when they think of your brand? What feelings are evoked beyond an inebriated mind? Will people run to their local liquor store to purchase it? Now that production has finished, you know you have made a quality product. It is time to build a brand that is indeed something to talk about. 

  Fortunately, you have access to millions of people worldwide in the palm of your hand. One social media post can turn your brand into an overnight success. The truth is it does not happen overnight. There are strategies implemented before top-tier brands disseminate their marketing campaign to the masses. But, with just one post or compelling article written by a reviewer, a brand can quickly become a household name. Should you consider influencer marketing? It is an effective tool, but it is not necessarily the only way to spread the word. Instead, consumer reviews and testimonials are part of a long-term marketing plan for sustainable growth. View your customer as a micro-influencer who will host parties at their home, for example, and share your beverage with guests. They will also share photos and videos with their family and friends on social media. It is up to you to guide them, so let’s get started.

Build a Sustainable Strategy

  What most brands learned once social media became a tool to advertise is that it can be quite exhausting. Let us be honest; it is a free advertising tool that can yield impressive results when used wisely and innovatively. But guess what…social burnout is a thing! Most brands hit the ground running only to find out that they have run out of stamina and, more importantly, marketing content. It is important to build the ship before you set sail. Further, you must be building marketing materials that can be used for the entire year! If you are fortunate to hire an editorial or marketing manager, they will help you plan and execute marketing strategies that are viable daily, monthly and yearly. The biggest mistake that new and old brands make in modern marketing is thinking they can build as they go or create limited marketing resources. Remember, view your brand as a ship. Would you set sail with holes in your boat or without life jackets? Would you trust a captain who just goes where the wind blows or someone with skills, expertise and instincts? Of course, you will have to take risks, but your ship should still have an anchor. 

  So, how do you build a sustainable brand? Your first task is to discern the “why”? What makes your alcoholic beverage unique? Is it premium gin? Does your brand use sustainable production methods? Is it a family-owned business? You need to build the story to draw a connection to your brand. White Claw is a notable example of a low-cal RTD beverage that jumped in front of the line from what seems like out of nowhere. Their brand is built around a health-conscious consumer who enjoys drinking without worrying about the scale. They found their “why” and then focused on reaching their targeted consumers. Some consumers gravitate toward brands that have a compelling story. Some brands have attached their beverages to an impactful cause, pledging that a portion of their profits will go towards it. Back Country Brewing, a brewing company located in Squamish, BC, has effectively incorporated giving back to the community as part of its brand ethos. They have also effectively created a brand built off creatively thought-out branding. The continuous colorful and playful references to the outdoors are displayed on beer cans and paired with names that complement the brand’s rustic outdoors theme. Damn Alligator Just Popped and Don’t Cross the Streams are great beverage names that stand out but are in alignment with what their consumer would expect.

  Once you have figured out the “why” and what makes your brand unique, you can start to build marketing materials around this. It will also help you design a logo and select colors that you will utilize throughout your marketing initiatives. This stage is just as important as the product development stage. The same amount of care you put into ingredients, quality and taste must also be applied now. So, you are ready to get started. What is next? Consistency!

Stay Consistent

  Stick to your plan and only make minor adjustments. The foundation of your marketing strategy should be solid. It is okay to make minor variations, but your goal should be to build and evaluate your initial plan. It is easier said than done because this is a competitive industry. Do not forget your “why.” Focus on who you believe would enjoy your beverage and stay laser focused. Devise a marketing plan that includes a calendar that you religiously follow. Always be two steps ahead. What does this mean? Some months of the year have holidays or special days like National Pancake Day. When creating marketing materials with images, blogs and videos, mention and highlight these designated days.

  Unfortunately, there are no days off. There is nothing worse than looking up a brand online to find that they have not posted on their blog for a year or last posted on their social media a week ago. Curate behind-the-scenes features that allow your consumer to see how the beverage is made. You can also give them a glimpse into the trials and tribulations of your business experiences. Do you label your bottles by hand? Share this! It is easy to get discouraged initially. The idea that no one is looking will cross your mind several times. What you do not see during this time is the opportunity to push boundaries and try things that are out of the box before your consumer has an attachment to your product, and then there is little room for change. If you decide to build a blog to support your alcoholic beverage, view it as a mini-magazine and schedule a feature at the same time every week. Be sure to include it in your newsletter along with new product launches or sales. 

  As you build a consumer base, predictability is the only way to stay afloat. As stated above, White Claw appeals to the wellness consumer, and Back Country Brewing the outdoors consumer. There is no need to reinvent the wheel. Expand and elevate your initial marketing strategy. Add new elements or products that complement it. This will help you stay consistent, give you more time to engage with your consumers and build a brand that is not a one-hit-wonder.

Imagine Your Brand in the Future

  Where do you see your brand five years from now? Ten years from now? Do not get caught up in current trends. This is why a sustainable strategy and consistency are the gold standard. You may have wondered why that blush wine in the odd shape bottle still does well with little marketing. This is what long-term, effective brand development looks like. This vineyard’s goal was to design a bottle that was aesthetically pleasing to the eye so it would be a great decor piece, while at the same time elegantly displaying the wine. This is a brand that understands that it appeals to a consumer who likes the finer things in life. Consumers will stay loyal to a product because it is consistent and because they feel connected to the brand’s mission. 

  Will the consumer tire of your product in the summer? Or are you a lifetime brand, like many exemplary legacy brands built around sports or music? If you would like to be the go-to campfire brewer, keep an eye on this consumer’s changing habits and desires to grow with them. 

TAKEAWAYS

Strategy: A solid blueprint will steer you toward success.

Consistency: Keep going even when no one is looking.

The Future: Can you stand the test of time?

Carbon Dioxide & Nitrogen Play Important Roles in Craft Beverage Production

Cyndi
4 gas tanks

By: Gerald Dlubala

The production, delivery and packaging of beer and the use of gases like carbon dioxide (CO2) and nitrogen (N2) are inseparable. But because CO2 is also a natural byproduct of the brewing process, monitoring its levels during and in the delivery of draught beer is critical. Carbon dioxide has flavor characteristics that could cause your beer to undergo flavor changes if left unmonitored. Additionally, if pressures are left unchecked and become too low in the draught beer delivery system, the CO2 is allowed to leave the beer, causing the pour to be flat. Conversely, too high CO2 pressure results in over-carbonation, causing flavor flaws and a foamy pour. Either problem causes increased product usage and waste, increasing the brewery’s costs and decreasing an already thin profit margin.

Inline CO2 Sensors: Mettler-Toledo, LLC

  Dissolved CO2 sensors are inline sensors that continuously monitor dissolved CO2 in numerous applications, including the beer brewing process. Using dissolved CO2 sensors allows brewers to monitor key quality attributes of their product, ensuring a consistent product and all-important mouthfeel to their craft beers.

  Mettler Toledo offers its InPro5500i inline sensors, thermal conductivity sensors optimized for brewing quality control and monitoring the carbonation levels of the beer. The InPro5500i line uses digital technology to simplify handling, provide durable performance and offer increased product life, reducing lifetime sensor costs.

  Additional benefits and characteristics of Mettler-Toledo’s inline sensors include the following:

•   Helping the brewer maintain consistency and overall beverage quality control

•   Sensors are manufactured with a food grade, hygienic, intelligent design and diagnostics

•   The use of proven technology to accurately provide trusted CO2 measurement

•   Maintenance predictability

•   Process connection compatibility, available with three process connections: Variant Type N, TriClamp 2 inch and 29 mm with cap nut M42

For more information on Mettler-Toledo’s CO2 sensors, visit www.mt.com/analytical

Nitrogen Dosing for Shelf Life, Stability and Packaging Excellence: Vacuum Barrier Corporation

  While the applications for nitrogen dosing in the beverage industry have remained consistent, the products that benefit from being dosed have and will continue to grow. Cannabis-based beverages, the dramatic growth and variety of available RTD (ready-to-drink) cocktails and all nitro-style beers, coffees and teas benefit from nitrogen dosing in one way or another. Through its preservation and pressurization qualities, nitrogen dosing has allowed the explosion of new and flavorful RTDs to be distributed on a widespread basis to more markets. Pressurizing a can or PET (Polyethylene Terephthalate) bottle with nitrogen adds stability to the container, allowing for easier, more efficient and effective stacking and shipping. Additionally, the fact that nitrogen is inert and will not react with other substances or ingredients makes it ideal for use in beverage applications and industry because it doesn’t impact the aroma or flavor of the packaged liquid.

  “Adding a nitrogen doser to a filling line is a pretty simple process,” said Jim Fallon, international sales manager for Vacuum Barrier Corporation (VBC). “Our VBC dosers are designed to be bolt-on additions to a filler, with no requirement for complicated electrical or control integration. After determining the proper application for dosing, meaning pressurization, inerting or nitrogenating, the next step is to find the optimal location on the filler for installation. VBC application engineers also determine the appropriate dosing unit based on the available filler space, the brewer’s line speeds and the dimensions of the container that the brewer is using. Then, along with the doser, sensors and control panel, all that’s needed to start dosing is your power supply or compressed air supply, depending on the models used.”

  Fallon tells Beverage Master Magazine that the optimal amount of nitrogen dosing recommended for any application is found by looking at the associated needs.

  “In the beverage industry, these applications vary from pressurizing non-carbonated drinks for container rigidity to purging oxygen from the headspace for extended shelf life and nitrogenating a cold brew coffee or beer,” said Fallon. “VBC engineers collect necessary details about the container volume and dimensions, fill heights, line speeds and the brewery’s target specifications and goals. Equipped with that information, we can guide customers to the appropriate settings to ensure the dose is sized properly and, just as importantly, makes it into the container in a timely and consistent manner.”

  Fallon says that for many years, the only new advances in nitrogen dosing had to do with the availability of increased dosing speeds. But today, VBC dosing units can consistently and reliably dose up to 2,000 containers a minute, more than enough for most filling lines. Because of this achievement, VBC was allowed to shift its focus on advancing and improving the reliability and ease of adjustability of its dosers.

  “We’ve continued to build out the functionality of our Servodoser that we initially released in 2016,” said Fallon. “We’ve reduced the parts prone to wear along with maintenance needs of the long-life servo actuator, which has a cycle life into the billions. In addition, a servomotor on the valve stem allows for dose amount adjustment without changing any mechanical parts. These improvements reduce downtime and allow on-the-fly adjustment of dosing parameters. Vacuum Barrier’s modular aseptic dosing systems are quickly becoming the go-to design with OEM (Original Equipment Manufacturer) fillers integrating aseptic filling lines.”

  For more information on Vacuum Barrier Corporation and nitrogen dosing, visit www.vacuumbarrier.com

Gas Blenders for Draught Beer Delivery Solutions: McDantim, Inc

  To successfully dispense draught beer, you need pressure, and that necessary pressure generally goes unnoticed until something goes wrong. As far back as the early 1800s, that pressure was supplied by compressed air, but as all brewers know, oxygen doesn’t play well with beer. The solution to this dilemma was to use CO2, which was good unless you tried to use 100 percent CO2 in draught beer delivery systems that needed to push the beer over long distances from huge brite tanks that were only safety-rated for up to 15 pounds of pressure. Unfortunately, increasing pressure to push more beer only puts the tank over the intended safety rating or puts the brewer at risk of over-carbonating the beer.

  But by using blended CO2 and nitrogen gas technology in the appropriate amounts, breweries and taprooms can maintain and balance their beer storage and delivery systems to ensure the integrity of their draught beers glass after glass, maintaining product integrity without losing any quality of taste, aroma or mouthfeel, just as the brewer intended. However, premixed cylinders were found to be expensive and generally offered the wrong blend for the beer industry. McDantim Gas Blending Technologies was the first company to introduce a gas blender that was technically sound enough and appropriate for the beer industry. 

  “It started in the late 1980s,” said Kayla Mann, sales and marketing director for McDantim, Inc. “McDantim’s previous owner’s father was approached by Guinness to develop an on-site gas dispenser. Unfortunately, industrial blenders wouldn’t work well because they couldn’t handle low-flow needs. So, McDantim devised a blender optimized for low flow rates to ensure that the beer secured in your keg or brite tank is the same beer dispensed into the glass for your thirsty customers. Our goal is to improve draught beer consistently and continuously worldwide.”

  Mann said that McDantim Trumix® Blenders are generally maintenance-free, with a plug-and-play mentality that demands no electricity or cumbersome maintenance schedules.

  “The goal here is to set it and forget it,” said Mann. “Brewery or taproom managers already have enough on their plate without having to worry about gas blending. Trumix® Blenders are easy to install and set up with regulators and can be nestled in wherever a brewer decides to locate their gas storage. All our products are customizable for different CO2 and nitrogen blending needs, so no matter what beer you are brewing and serving, you’ll get what you need. We use six eager and local breweries as our testing grounds with our products, so we receive real-life and real-time situational help to ensure our blenders and products do what breweries need them to do. Our custom-configured blender solutions improve efficiency and decrease waste and are based on useable volume, including the length of delivery lines, the number of available taps and servers and the forecasted number of kegs per hour you can expect to use at any given time. It comes down to how many servers will be drawing out of how many taps simultaneously. Busy, large taprooms with several servers that stay busy for lengthy amounts of time will need a higher flow rate than the smaller craft breweries.”

  Mann tells Beverage Master Magazine that McDantim also offers a free downloadable app that can be used anywhere within the depths of a brewery because it needs no internet connection.

  “We’re all about education to improve the quality of the draft beer industry across the board,” said Mann. “The app is there for you to know what blend of gases is optimal for the beer you are producing or if you are struggling with pressure or specific lines. We can easily walk you through the app and teach you how it can help and improve your draught beer. It’s just another tool for everyone from the beginner through the seasoned professional, and it is valuable for those that may be hesitant to ask for help as well.”

Conditions included in the calculations are:

•    The beverage temperature in the keg.

•    The required keg pressure.

•    The CO2 content of the beverage.

•    Elevation above sea level.

•    The gas blend (CO2 percentage) of existing blender.

Your input conditions help determine the following:

•     The optimal CO2/N2 blend for your specific location and conditions.

•     What range of pressures you can safely apply to your beverages for optimal carbonation.

•     Easy U.S. and metric unit conversions.

•     The predicted CO2 content that will be maintained under unusual conditions, like high elevation production.

Additionally, McDantim’s free gas blend app includes helpful calculators for other areas of your draught beer process, including these:

•    The cost analysis calculator provides insight into how on-site gas blending with Trumix® blenders can save you money.

•    The gas usage calculator will forecast and determine how many kegs of beer you can expect to dispense using Trumix® Blenders or premixed cylinder gas.

•    The line restriction calculator helps brewers with their draught system design to get the correct restriction values to keep the beer from under or over-carbonation.

  McDantim’s Trumix® Blenders can be used equally well with all clean CO2 and nitrogen sources, including high-pressure cylinders, bulk tanks and separators. 

To contact McDantim or get more information on gas blenders, visit www.mcdantim.com

More Than a Pretty Face

Cyndi

Image Is Important, but so is Safety and Productivity

beer can lying on a flat surface

By: Cheryl Gray

While attractive packaging can draw new business for craft brewers, protecting what’s inside that packaging can make or break the bottom line. The same detailed attention is required to move products to store shelves swiftly. Fortunately, there are companies with specializations in each of these production areas.

  Among them is Industrial Physics, a test and inspection company considered to be a global leader in its field. Industrial Physics operates across a wide range of testing brands, each cornering a specialty. Those brands include CMC-KUHNKE, Steinfurth, Quality By Vision, Eagle Vision and TQC Sheen. Although it offers its customers multiple options, the company has a singular purpose: to guard the integrity of brands and products for manufacturers, production lines and laboratories across multiple industries worldwide.

  Steve Davis is the global product line director at Industrial Physics. He leads a team of experts who ensure that the company’s equipment protects the integrity of its customers’ metal packaging. Davis brings more than 20 years of engineering experience, with particular expertise in designing and developing metal packaging testing systems. He describes how Industrial Physics provides practical solutions for breweries large and small.

  “From seam inspection to label inspection, leak detection, code reading and abrasion testing, we’re here to protect the integrity of our customer’s beverage product.”

  Industrial Physics offers 40 testing applications and 2,500 products for a vast array of manufacturers, including breweries. Davis explains how the company leverages industry leadership to benefit its brewery clients:

  “The power and versatility of Industrial Physics allow us to support a broad range of breweries all over the world. And that really sets us apart from any other test and inspection provider. No matter the size of your brewery or the type of test you need to conduct, we can support you.

  The equipment allows organizations to test across a multitude of applications. Whether that’s ensuring that a can containing a fizzy drink won’t leak or that a cardboard box is strong enough to survive the turbulence of transit, the solutions are extremely diverse. We have a wealth of solutions available for the beverage space. From bottles to cans and kegs, we support beverage manufacturers of all sizes.

  But we don’t just provide equipment. At Industrial Physics, we’re equipped with some of the world’s finest minds within the world of beverage packaging and metal packaging. With an unrivaled portfolio of products that span so many specialties, we speak with our customers to ensure they’re discovering a solution that is suitable for their unique needs. With our equipment, we can help customers take their production and testing to the next level by investing in an instrument that will allow them to enhance their current setup and ultimately grow their offering by reducing waste and costs significantly.

  We also offer service solutions for our instruments, supporting customers with installation, calibration, preventative maintenance and repairs. No matter where you are in the world, we have local experts on the ground who can support your needs to ensure your instruments are operating efficiently.”

  One of the Industrial Physics brands is CMC KUHNKE. Davis describes its versatile options, all designed to save time and money:

  “Whether you’re a small brewery needing a compact and cost-effective solution like our useful CMC-KUHNKE seam saw, or a global giant within the world of beer looking for a more advanced, automated solution such as our CMC-KUHNKE Auto XTS, we can help you with this and everything in between!”

  Safeguarding the integrity of brewery products requires thought in every step of production. When it comes to keeping production lines moving swiftly and efficiently, Custom Conveyor Concepts promises to meet the needs of virtually any brewery. Matthew Gill, a co-founder of the company, has been in the packaging industry for some 40 years, working various floor positions before moving into management, sales and consulting. Gill explains how Custom Conveyor Concepts evolved:

  “In terms of the number of years in business, we are relatively new, as we were founded in 2015. However, Custom Conveyor Concepts (CCC) was formed after having been producing conveyors for more than 10 years for Exchange Team Advantage (ETA) and their customers. ETA was founded in 2005 as a used equipment supplier and OEM rep for virtually all aspects of liquid and powder packaging – depalletizing/unscrambling, filling, capping, labeling, coding, case packing and palletizing – literally, start-to-finish, turn-key applications. In doing so, we were requested to provide the connecting, often challenging, conveyor. After years of producing it for specific applications, the decision was made to make it available as its own commodity, and Custom Conveyor Concepts was born.”

  Gill emphasizes that his company’s products are designed to solve problems confronting breweries, whether accommodating tight spaces or tight deadlines.

  “We provide solutions. Whether it is space limitations, the need to expedite size changes or how to increase output, the only essentials required are your needs. Tell us what you want to do, and we will work with you to make it happen. We have worked with many startup companies, as well as very large, universally recognizable companies, and helped them grow. Our conveyors are versatile and expandable, as you can easily add, remove or re-route them. We only offer stainless steel, and our conveyors are constructed out of 11 ga., providing solid, durable equipment that will stand up to the harsh cleaning chemicals and offer ease in cleaning.”

  Gill adds that Custom Conveyor Concepts understands how to help breweries maximize their equipment investment while, at the same time, staying within budget.

  “We have worked with 600 cpm breweries down to 3 hd. fillers and manual crowners, when bottles were more prevalent. Our defining quality, in addition to the quality product we provide, is the attention we give to our customers and helping them achieve their needs, often providing options to help them stay within or define their budgets. We provide specialty equipment and service at ‘regular’ pricing. We don’t charge extra for non-stock items or detailed line layouts for placing the equipment. 

Our entire team’s product knowledge and industry experience are irreplaceable for providing application solutions. We do where others say it can’t be done. Many of our competitors don’t want to be bothered with small, low-dollar projects or small projects that require you to seek a solution. We excel at those.”

  Among the most popular products from Custom Conveyor Concepts are its serpentine conveyor and accumulation tables. Gill explains that while space is at a premium in most production facilities, it is more so in smaller operations. These two items, he says, offer ready solutions.

  “Utilizing a serpentine conveyor can convert the space a 5-foot conveyor consumes into 15 feet. The ability to make a roll change on a labeler without shutting off the filler makes the ROI for inline accumulation tables worth every penny.”

  Creating the bottling for breweries worldwide is the role of BPS Glass, a company based in Panama City, Panama, with its U.S. office in Atlanta, Georgia. As a family-owned business that began some 60 years ago, BPS Glass now boasts a reputation as one of the leading suppliers in the glass packaging industry. At its core is an emphasis on investing time, resources and effort in training its team members to create viable, innovative solutions for clients. Isidoro Cherem, a spokesperson for BPS Glass, says that the company works with breweries and distilleries that range from small craft operations to large commercial facilities. Cherem adds that dedication to optimal customer service sets the company apart from its competitors.

  “Thanks to our amazing team of experts and our commitment to excellence and creating long lasting relationships with our customers, we have grown to be the largest packaging supplier in the South and Central American region. We are constantly working towards expanding into the USA, and we are sure that we can replicate our success in the North American region.”

  BPS Glass offers more than 150 types of glass bottles for multiple industries, along with custom bottle designs. It also promotes services that include client-specific packaging and assistance with logistics to ensure timely, secure delivery of orders at the most cost-effective rates.

  Label design is another service BPS Glass provides its clients, with a focus on label colors and shapes, materials, textures and other aesthetic components. The company adds that it equips its clients with real-time marketing analysis, keeping an eye on marketing trends to help clients choose the right bottle, label and packaging for a product.

  Multiple choices in bottle closures are also on the company’s product roster. It points to its decades of knowledge in the chemical processes, physical considerations and industry safety standards to help clients safely package a product for consumers.  

  Whether using cans or bottles, breweries must factor in how best to protect the integrity of their product, both in terms of taste and safety of consumption. In addition, the efficiency of a production line depends upon investment in the right equipment that can move products swiftly and safely to store shelves. These considerations require the expertise of companies that know how to help breweries achieve these goals on time and within budget. 

Good Beer Makes Great Whiskey

Cyndi

By: Kris Bohm, Owner of Distillery Now Consulting

The idea to start a craft distillery can come from many places. If you talk with almost any brewer they will tell you the idea of a distillery is one they have considered. The tools needed to start a distillery are so similar to a brewery that much brewery equipment is identical to the equipment found in a distillery. Brewers who want to jump into making distilled spirits have most of the knowledge, tools and skills needed to manufacture spirits. One skillset brewers lack is in the art of operating a still but have no fear we are here to help. Let’s talk about selecting the right still for a brewery to make amazing, distilled spirits. Afterall good beer makes great whiskey so if you have a brewery why wouldn’t you do it?

Designing a Distillery

  As the dream is put down on paper and planned for the specifics start to come into play. Are you going to make whiskey, vodka, gin , rum or do you plan to make all of them? What do you want your still to look like? Will it be a shiny copper showpiece or a stainless economical work horse? What ingredients you plan to utilize to produce distilled spirits is very important to consider when selecting the right still design. The equipment for distilling potato vodka is very different from that used to distill malt whiskey. If you are unsure where to start here, this may be a good point to bring in an expert to help you make these choices.

Selecting the Right Still Size

  The first question many folks ask when selecting a still is something like how big of a still should I get? Should I get a column still or a pot still? What is more important to consider about how big is how small is too small? A common issue with many new distilleries is that they start off far too small. In fact some distilleries start so small that they outgrow the capacity to produce enough product within a year. The opinion held by most whiskey distillers is that a still any smaller than a 250 gallon will hinder your distillery from growing. Depending on the configuration of a still and the ABV of the wash a 250 gallon still can produce a single whiskey barrel per day. This key number is important to consider. Why this matters is that a larger still only costs slightly more than a smaller still. Secondly the larger your still is the less you will spend on labor per gallon of spirits produced.

Key Considerations

  It can be easy to underestimate the real quantities of spirits a distillery needs to produce to be successful. This is especially true if you plan to distill any spirits like whiskey or brandy that need to age for years before they are ready to bottle.

Some of the best whiskies from around the world like bourbon, or single malt whiskey spent years in the barrel before they were bottled. If the products you plan to make are going to taste as good as other products on the market they will need to age as well. There are no proven shortcuts to age spirits faster, but there are plenty of examples of so called “rapid aged” products that were not successful. The point of all this is that you have to plan years into the future. If you buy a still that can only produce enough spirits to meet the demand you are planning for today this still will not be able to make enough spirits to age to meet your demand several years down the road. The more whiskey you are putting in barrels every day the more potential you have to grow. To put a cap on growth by selecting too small of equipment can be a costly mistake.

  Selecting the perfect size still or stills is not an easy decision to make. There are a multitude of  factors that must be carefully considered to make these decisions with confidence.

Budget is the critical factor. Budget not only for the cost of the still but also other equipment needed to support the still is important.  A budget for operating expenses is also helpful as once you get the still it takes capital for raw materials, labor and overhead to operate the equipment.

  Another consideration to take in is the size of the facility.. If you only have 500 square feet of space for your equipment, then it is unlikely that a 500 gallons still is going to fit well into your building and still leave room for the operation to function. You should not select your equipment until you know the amount of space you have for the equipment.

  Production Goals are a critical factor that must be given thought and planning. If you want your distillery to be producing 1000 barrels of whiskey every year then there is no way a 250 gallon still can get the job done. Sizing the still for the long term production goals of a distillery will help you stay ahead of your growing pains. The size of the still will directly determine the quantities of spirits you can distill.

  Skilled labor is an essential part of the equation. For a brewery to make the best spirits possible it is a wise investment to bring in an experienced distiller to help guide the process and handle the distilling. Although there are many similarities between the brewing and distilling, there are also vast differences in the process and in the regulation of the industries. A skilled distiller will bring the knowledge and experience to the table to help you make the best whiskeys possible and also ensure it is done in a way that is compliant with regulations.

Lets Make Whiskey!

  Building a brewery is an expensive endeavor and most brewhouses in a brewery are not run constantly. The addition of a still can create the opportunity for a brewery to run its brewhouse more often to create distillers’ beer to be distilled into whiskey. This is good for the business as it can create greater economies of scale. To do this effectively is it paramount to select the right size still to meet your goals. This is a huge opportunity for most breweries and one that can create immense new value and also open new markets for a brewery. If your brewery is ready to take the leap into distilled spirits now is the time to do it. After All most brewers love a good whiskey and good beer can be transformed into great whiskey.

Three Commonly Overlooked Legal Issues for Breweries

Cyndi
beer rest on a flat surface beside a gavel

By: Brian D. Kaider, Esq.

Breweries have to deal with many legal issues, including licensing requirements from various federal and state agencies, formation of a corporate entity, negotiating contracts, and registering trademarks.  With so many new skills and requirements to learn, it can be easy to miss something.  Below are examples of three legal issues that are often overlooked.

Failing to Require Employment Agreements

  There are a million things to do when starting a brewery.  Finding and hiring staff checks off a significant box on the list and it can be easy to overlook the need for an employment agreement for these early hires.  Later, there is little enthusiasm to impose these agreements retroactively or to apply them to new hires when they were not required for original employees.   Yet, employment agreements serve a variety of functions that are so essential that their omission can cause substantial problems down the line.  

  As a preliminary matter, an employment agreement defines the relationship between the parties.  Often breweries will try to categorize workers as independent contractors as opposed to employees, because this distinction allows the brewery to avoid providing certain benefits that are required for

employees.  But, the IRS does not care about the brewery’s characterization, it cares how the worker is treated, and the key determination is control.  An independent contractor is hired to provide a function, but has significant autonomy to perform that function when, where, and how they see fit.  Often they will provide their own equipment and set their own hours.  By contrast, if the brewery exercises control over the worker by imposing certain work hours, requiring the job to be performed in a certain way, and providing the equipment used, the worker is considered an employee.

  There are many important sections of an employment agreement, including designation of at-will employment, requirement to abide by rules set forth in the employee handbook, etc.  But two often-overlooked sections relate to confidentiality and assignment of intellectual property.  Although the brewing industry is far more collaborative and congenial than most, it is still a competitive business and certain information should be treated as confidential and/or trade secret.  Employees should be made aware that unauthorized disclosure of business plans, growth plans, customer and supplier lists, recipes, and marketing ideas, to name a few, can cause harm to the business.  This section of the employment agreement not only serves that notice function, but can set up more enforceable consequences if the terms of the agreement are breached.

  Breweries generate a significant amount of material that can be protected by trademark or copyright registration.  Label designs, beer names, domain names, and social media accounts are all valuable assets that should belong strictly to the business.  An assignment of intellectual property section in an employment agreement sets forth the understanding that anything created during the term of employment is the sole property of the business.  As an example, if an employee has artistic talents that are used to develop designs for labels, those artistic designs should be assigned to the company.  Otherwise, the employee would have the right to sell the same designs to other companies or individuals who may use them in a way that is detrimental to the brewery’s brand.

Failing to Secure Music Licenses

  Music is such a common part of the brewery experience that many people take it for granted.  However, breweries must obtain the proper licensing to play copyrighted music in their establishments or they could face a copyright infringement suit and potentially crippling statutory damages that could be as much as $150,000 per instance.

  Under U.S. copyright law, the owner of a piece of music has the exclusive right to control its use, including whether or not it may be played in a public setting.  Typically, however, while the artist may own the copyright, s/he delegates the task of licensing its use to a Performing Rights Organization (PRO) such as the American Society of Composers, Authors, and Publishers (ASCAP) and Broadcast Music, Inc. (BMI).  In some cases, a single artist may have some of its songs licensed by one PRO and others licensed by another.

  So, is a license required for every song played in a brewery?  Generally, yes, in order to publicly play any piece of music, a brewery must obtain a license from the PRO that has the piece in its catalog.  Below are some common situations where a license is required, followed by some exceptions to the general rule, and one very simple way to stay in compliance.

  Disk Jockeys by their very nature play a variety of pre-recorded music.  Although it may be the DJ that selects the pieces it plays, because the venue derives the benefit of the music, it is responsible for obtaining all necessary licenses. 

  Bands that play “cover songs” written by another artist fall under the same category as DJs.  But, what about bands that play only original songs?  The brewery should ask the band whether it is affiliated with a PRO.  If so, even if the band is playing its own music, the venue needs a license for the performance.

  Purchased music is only licensed for private use.  Many people assume that when they buy a record, CD, or digital audio file that they own the music and can do anything they want with it.  In reality, the purchase price of that music only covers private use and does not entitle the owner of that copy to broadcast it to the public.  So, even if the brewery owner brings in her own collection of vintage vinyl, she must obtain a license to play the records in the taproom.

  Generally, music licensing fees are not terribly expensive, but vary according to the size of the establishment and the type of music being played.  In some cases, discounts may be available.  For example, the Brewers Association has negotiated a discount with BMI of up to 20% for its members.  

  There are a few exceptions that will enable music to be played without a license, but they are narrowly construed and must be followed carefully.  Music that is broadcast to the general public over the radio, television, cable, or satellite services may be played in a brewery without further license if the establishment is smaller than 3,750 gross square feet, including all interior and exterior spaces used for customer service.  Larger spaces may also qualify for license-free performance, but other restrictions apply, such as: the music may not be played over more than six loud-speakers or more than four in one room; there may not be a cover charge to enter the establishment; and audiovisual content may not broadcast over more than four televisions or more than one in a single room.  Music may also be played in the brewing space or offices for the benefit of employees, as long as it is not audible to the patrons in the tasting room.

  By far, the simplest way to get music in the brewery is to use a commercial streaming service, such as Pandora For Business or Sirius XM For Business.  The fees for these services include performance royalties and do not require any additional license.

Failing to Report Changes in Proprietorship or Control

  It should come as no surprise that when forming a brewery the TTB will want to know exactly who owns the business and who is in charge.  It should be equally unsurprising, then, that if there is a change in ownership or control of the business, the TTB must be informed.  Yet, this is an often-neglected requirement and failure to adhere to the letter of the law can have serious consequences. 

  It is important to understand the distinction between a change in proprietorship and a change in control.  A change in proprietorship occurs when there is a change in the entity that owns and operates the brewery.  The obvious example is if the brewery is sold to a new company.  Clearly in that situation, the TTB must be made aware of the new ownership and the law requires that the notification be made well in advance of the proposed change.  Specifically, 27 C.F.R. §25.72 requires that the successor brewer “qualify in the same manner as the proprietor of a new brewery” before beginning operations.  Less obvious examples might be the conversion of an LLC to an S-Corporation or the folding of the brewery business under the umbrella of a parent corporation that has the same owners and officers as the brewery business.  Both those situations involve changes to the proprietorship and must be cleared with the TTB before operating under the new structure.

  By contrast, a change in control occurs when there are changes in stock ownership, LLC membership unit ownership, or major changes in the corporate officers or directors of a corporation.  The same business entity continues to operate the business, so there is no change in proprietorship, but there is a change in who controls the business within that entity.  In this situation, an amended Brewer’s Notice is required to be submitted within 30 days of the change.  Further, if a new LLC member or stockholder holds more than 10% interest in the business, a new Personnel Questionnaire must also be filed.  Common situations that involve a change of control may include the removal of a founder, death of a member, addition of a new corporate officer with ownership interest, addition of new members through a round of fund-raising investments, or the buy-out of previous investors.

  Failure to abide by the notice requirements for changes in proprietorship or control can have serious consequences, including forced shutdown of operations until the licensing matters are resolved and possible monetary penalties.

Conclusion

  These are just three of the legal issues that breweries often overlook.  There are, of course, many more.  Engaging an attorney that understands the industry early in the process of starting a brewery and maintaining the relationship throughout the life of the business is the best practice to ensure compliance with all requirements.

  Brian Kaider is the principal of KaiderLaw, a law firm with extensive experience in the craft beverage industry. He has represented clients from the smallest of start-up breweries to Fortune 500 corporations in the navigation of regulatory requirements, drafting and negotiating contracts, prosecuting trademark and patent applications, and complex commercial litigation.