Legal Implications of Playing Music at Your Brewery

By: Tarah K. Remy, Dinsmore & Shohl, L.L.P.

Visiting a brewery is meant to be an experience, and customer engagement plays a large role in creating a great one. As the owner, you know your brews are unparalleled, and your goal is not only to share them, but to keep customers coming back. One way to do this is to establish an inviting atmosphere. In most cases, that involves music.

  Music and beer go way back. In 1800 B.C.E., the Sumerians composed the “Hymn to Ninkasi,” which served as not only a song of praise to their goddess of beer, but also as an ancient recipe for brewing.  So, it is safe to say when a customer walks into your brewery, they’ll expect to hear music playing over the loud speakers, or even to see a live band. However, there are serious intellectual property considerations every brewery must take into account when choosing music to create that perfect experience.

What the Copyright Act Protects

  As a general matter, the Copyright Act lays out the basic rights of a copyright owner. Among other things, it protects a songwriter’s and their publishers’ (the copyright holder) musical composition or written work, also known as a musical work. When a musical work is performed or broadcasted in a public space, the copyright holder is entitled to receive a performance royalty, which is the money paid to the copyright holder in exchange for the right to publicly perform their musical work.

Why Your Brewery Needs a Performance License to Play Music

  Copyright is a form of property, and once music is written down or recorded, it is copyrighted. The copyright holder is the owner of that copyright and is granted a performance right to the copyrighted materials. If you want to publicly perform a musical work, you need to pay a performance royalty to the copyright holder. The performance license acts as written permission to play a copyright holder’s musical work in a public space.

  Doing so without a performance license, (without legal permission) places your brewery at risk for litigation. Though the Copyright Act limits the award for copyright infringement to between $750 to $30,000, it is within the court’s discretion to award between $200 to $150,000, not including attorney’s fees and costs. Whether the court can increase or decrease the award depends on whether you knew you were violating copyright law. No matter the circumstance, if you violate copyright law, you will be required to pay, and the gamble of just how much is not worth the risk. Acquiring a license removes the guesswork and allows you to maintain control over your brewery’s finances.

When You Need to Consider Acquiring a Performance License

  You will need a performance license or permission from a copyright holder under at least the scenarios below:

1.  The musical work is played in your brewery using Spotify, Amazon music, Pandora, Apple Music, or any other streaming service. Though you are covered bunder your personal subscription to play music for yourself or in very small spaces, once you plug your device into a loud speaker to be played in a large space where a substantial number of people are present, this triggers the performance license requirement.

2.  The musical work is played in your brewery using CDs, records, or anything similar. Buying the CD or record does not count as obtaining a performance license. Once you decide to play your favorite CD or record inside your brewery to be heard by a substantial number of people, in most cases, you must obtain a performance license.

3.  A live band is hired to play covers of music originally written by a third party in your brewery. In this case, the venue, not the cover band, is required to acquire the performance license.. If you hire a band to play in your brewery and they plan to play covers, make sure your brewery has a performance license covering the songs on the band’s set list before hiring. Keep in mind, however, this generally does not apply if the band is playing music it has composed or is playing music in the public domain.

How to Obtain a Performance License

  Contact a Performance Rights Organization (PRO):  You can obtain a performance license through a Performance Rights Organization such as BMI , ASCAP, and SESAC. These entities function as middle men between the copyright holder and the entity acquiring the performance license. Given the rate at which music is played and experienced around the world, it is virtually impossible for copyright holders to keep track of performing rights. Acting as facilitators, PROs acquire rights from these copyright holders and grant a performance license covering their entire music set to businesses and requesting parties. So not only do PROs simplify the process for copyright holders to receive their performance royalties, but business owners no longer need to contact individual copyright holders to acquire performance licenses.

  Each PRO covers specific musical works by various copyright holders. By obtaining a performance license through just one PRO, you are limited to that PRO’s specific list of music. Be sure to review each list covered by each PRO to determine whether you need a license from one or all. You can also consider acquiring a blanket license that covers all three of the main PROs (BMI, ASCAP, and SESAC) to reduce the chance of potential copyright infringement claims from these organizations. A blanket license is convenient, as it likely covers a large list of music, which in turn reduces the need to carefully review a cover band’s set list and further gives you the freedom to stream music without a second thought.

  Sign Up for a Streaming Service Business Account:  Some streaming services, like Spotify and Pandora, offer business accounts. Simply by signing up and paying a subscription fee, business accounts provide access to fully licensed songs. Via their business platforms, these streaming services have obtained performance licenses from PROs on your behalf, and in most cases, they have performance licenses from more than one PRO, which broadens your music list options.

How much a Performance License will Cost

  The cost of obtaining a performance license through a PRO may vary depending on various factors, including how many breweries you have, the square footage of your brewery, your brewery’s customer capacity, how often music is played, whether the music is recorded or live, and more. The costs start at $500 and increase from there. Streaming service business account costs can be found directly on their websites, where they periodically provide discounts. At the end of the day, though obtaining a performance license may seem pricey or a low priority, the costs of arguing a copyright infringement claim are significantly higher. Budgeting in the cost of a performance license will save your brewery money in the long run.  Here is a link to help you learn more. https://www.bmi.com/digital_licensing/more-information/business_using_music_bmi_and_performing_rights

  Finally, keep in mind the Copyright Act covers exceptions to the performance license requirement, meaning it’s possible your brewery may not require a performance license. So before you sign up or register for anything, we always recommend reaching out to an attorney to review the performance license agreements and your circumstances. Additionally, if you are not sure whether your business meets the requirements, or whether your business might be exempt from the performance license requirement, for peace of mind, reach out to your attorney or the Dinsmore Beer, Wine and Spirits team. We are here to help!

An Ingredient For Success: Adding a Business Coach to Your Craft Beverage Company

By: Chris Mulvaney, President, CMDS Marketing Agency

So, you think you have it all. A great product, niche location, rockstar staff … ultimate success will no doubt come knocking at your door to order one of your specials. Right?

Well, maybe.

  Hard truth. When it comes to craft beverage marketing and branding, making those delicious bevvies is only half the battle. Many craft beverage companies that failed also had a great product, perfect location, and an awesome staff. So … why did they fail?

  For one, planning. Part of a craft beverage business is, well, the business. And while that part may not taste quite as good, it’s still a huge part of running and scaling your company so that it thrives for years to come.

  Planning your craft beverage business takes into consideration some very important components. Branding is one of them. If you don’t have solid branding, then you’ll have a tough time standing out in today’s crowded craft drink market.

While there was a time that breweries and distilleries could succeed without strong branding, much has changed. Today, statistics show that a new brewery opens up almost every day. That means crazy competition, and as a result, you really need strict branding and positioning in order to stand out. Without that, even the best product can get lost in the mix and drown into a drain of obscurity.

The What, The How, and The Why

  Simon Sinek familiarized the concept of the “What,” the “How,” the “Why” in his book, “Start with Why.” The concept is about having three layers to your brand story.

  The “what” explains what your business is in simple terms (“My business offers locally produced cider”).  The “how” is how you do it (“we use on-site fermentation and locally-sourced apples”).

Unfortunately, while most craft beverage companies may be able to explain the “what” and the “how”, they tend to lag in the “why”. And the “why” is usually the most interesting part of the story because that is where the emotion comes in (“my partner and I both have celiac and were not able to enjoy a traditional brewery experience, so we wanted to offer a delicious beer alternative for gluten-sensitive customers and those who want something a bit different”).  The “Why” is key because it draws people in and creates a deep emotional connection, which is more compelling.

Your brand is the perception of your company by your customers. It is the heart of your message and it’s how your customers will portray you on social media. The emotional connection with your customers is what drives the purchase. It is your “why”.

  This is where it also gets tricky. You can’t forget about the product. Above all else, your customer has to like the taste of what you sell, so quality is also vital.

  Therefore, branding involves defining key concepts, creating emotional attachment, and differentiating yourself from your competition, all while keeping a great product offering. It can be a challenge to balance it just right, and that’s where a business coach comes in.

  Typically, business coaches are experienced entrepreneurs and business owners who then decide to use their talents for building and growing a business to help other business owners reach their goals.

  They can provide far more valuable and personalized advice than any found online. They are essential to success – and are used by most humans across the board in other areas, yet the same principle often fails to apply to a business’ growth.

Take sports or music. If an athlete wants to improve their skills, the best thing they can do is join a team with a great coach. Likewise, a musician will hire a teacher to help them reach rock star  heights.

  Essentially, having a business coach is like having a trusted coach or teacher, and they can prove essential to your brand’s ultimate success.

Why Every Craft Beverage Businesses Should Enlist a Business Coach

  In simple terms, business coaching is a process used to take a business from where it is now to where the business owner wants it to be.

If a business owner has tough questions or runs into problems along the way, their coach will be able to help them navigate their issues in the most effective way possible.

Getting Started

  A good business coach will ask you to list your core values and help you figure out what will make you stand out from your competition. Your customers have to understand your brand and concept to immerse themselves in the experience. You will also be asked how you would like to grow in a manner consistent with your brand.

  The hiring process should include a discovery period between yourself and the potential business coach to make sure you are both aligned and should include the following:

1.   Answer detailed focus questions so your business coach gains insight of what you want to accomplish.

2.   Review their coaching/consulting package thoroughly, so you’ll have a good idea of features, benefits, time alloted and pricing.

3.   Schedule a 20-30 minute discovery call to talk through the project and determine if you are a good fit to work together.

  A Business Coach should also address focus questions. These can include the following:

•    What do you need help with? Be as specific as possible about the problem you need to solve or opportunity you want to tackle.

•    What is the ideal outcome or result you want to achieve? What does it look like?

•    How urgent is this project? How important is it to tackle this (1 to 10)?

•    What’s your timeframe for this project/goal: 1) ASAP, 2) within the next few months, 3) sometime this year?

  In addition to evaluating strengths and weaknesses, it’s also important to define business goals. For some people, the goal is the freedom to do what they want. For others, it’s financial security. When setting goals, make sure they are specific, optimistic (but realistic), and offer both short- and long-term plans so you can evaluate your progress. 

  Throughout this entire process, business coaches serve as an invaluable source of personalized information and advice, providing business owners with specific industry navigation tools and assisting in setting attainable goals.

  Coaching Packages will reflect just how much time and assistance your business will need and a coach will work with you regarding budget and timelines.

A good business coach understands that exponential success does not happen overnight. That is where their coaching and development services come into play. A great thing about a business coach is that you can hire one at any stage and scenario of your business, whether you are just starting out, your business is struggling and you need a way to revive it, or you are an established name looking to take it to the next level. There will always be a need for a business coach to provide you with considerable entrepreneurial insights, expertise and innovative business ideas at any level. The benefits of having one cannot be overstated.

Large vs Smaller Businesses

  In many cases, the challenges and goals of small businesses may differ from those of large businesses.

  For example, a start-up brewery in a more localized setting, looking to attract more local customers, will have an entirely different set of goals and strategies than a large establishment that caters to multiple locations and ships on a large scale.

With that said, most business coaches will be experienced in working with small or large businesses since a big part of their job  is to learn as much as they can about each company and owner that they are working with, and developing a strategy that is uniquely suited to the specifics of each situation.

In other words, a high-quality business coach will likely be able to help you regardless of budget, company size or how large you want it to grow.

The Last Gulp

  The most important rule of self-evaluation and goal-setting is honesty. Going into business with your eyes wide open about your strengths and weaknesses, your likes and dislikes, and your ultimate goals lets you confront the decisions you’ll face with greater confidence and a greater chance of success.

  Look at the coaching experience through honest eyes and know that the purpose of a business coach is to make the life of the business owner less stressful and their business more successful, which in amongst itself is something to raise a glass to.

  If you need help on where to start, Chris Mulvaney has been providing Business Coaching Services to business owners and fellow entrepreneurs for over 15 years. His marketing agency, CMDS, can be a great compliment to these services. Feel free to reach out for a consultation and you will be put in the right direction by someone who can take your business to the next level of craft beverage success.

Just Add Honey: The NEW Buzz Worthy Ingredient!

By: Hanifa Sekandi 

You may have heard about the Bee’s Knees honey-infused prohibition-era cocktail. Perhaps it is your go-to drink on a warm summer night. This drink is a refreshing blend of gin, lemon juice and a touch of honey, a guilt-free beverage to indulge in. It was crafted by Australian-born bar-tender Frank Meier in the 1920s, who simply elevated a Gin Sour by replacing simple syrup with honey. One hundred years later, it’s still a buzz-worthy beverage, with an ingredient favored due to its anti-inflammatory and antimicrobial properties. Honey is also considered a healthier sweet alternative to refined sugar since it consists of trace minerals and vitamins. It can still be high in calories, but it’s a better option than high-fructose corn syrup and sugar.  

Why is Honey all the Buzz? 

  The term Bee’s Knees means “the best” or “outstanding,” and honey does more than add a little sweetness to your life. Although one might not liken a few cocktails to health and well-being, honey has become a star ingredient for nouveau bottled and canned beverages that appeal to the health-conscious consumer, and a cocktail isn’t the exception.  

  A question that may come to mind is, why honey? Honey, liquid gold, has been an important component in alcohol that predates the prohibition era. Mead, known as the “drink of the Gods,” is a fermented alcoholic beverage made with golden honey, bacterial culture or yeast, and water. This ancient honey wine found in Africa, Asia and Europe has a long lifeline dating approximately 4,000 years. Fast forward to the 21st century, and honey is not just a royal sweetener with great health properties. It’s an ingredient that makes one brand stand out from the rest. 

  Once touted as your grandmother’s therapeutic cure-all for staving off a cold or sore throat during winter months, as health becomes a primary concern for consumers, honey has become a coveted and cherished ingredient due to its undisputed benefits. As the negative impacts of refined sugar consumption become clear, the alcoholic beverage industry turns to alternatives like honey, which add a sweet touch while being much better for the body. 

Sipping Guilt-Free Cocktails  

  Since refined sugar is a frowned-upon ingredient, brands that do not pivot with the health-conscious consumer will find themselves left behind in a market that calls for change where curation, sourcing and production is concerned. Yes, having a few libations with friends during a funfilled cottage weekend is the norm, but ingredients matter. As more people take the time to read the label, what’s in a premixed cocktail will not be overlooked simply because it tastes good.  

  For individuals who see fitness as a lifestyle, finding alcoholic beverages that support this ethos is a top priority. Wellness websites often list low-calorie and reduced-sugar canned cocktails without artificial sweeteners or chemicals that can diminish a health-conscious nutrition plan. Most people look for caloric content first and then what ingredients are used to provide flavoring and added sweetness. This higher standard from consumers has brands leaning towards natural ingredients and moving away from artificial flavorings, sweeteners and additives.  

  A la carte specialized cocktails are now accessible at the consumer level. Access to simplified, clean versions created by top bartenders and mixologists can be found at your local liquor store or delivered to your doorstep. Feeling a little bit better about decisions where imbibing is con-cerned has gained strong support via social media initiatives and marketing campaigns by brands who aim to shake up the industry. Once the new kid on the block, premixed drinks made with honey, natural sweetener or real fruit are now taking center stage.  

  Honey-infused cocktails are the gateway to what is next on the horizon for “fun nutrition.” Although honey is a rockstar ingredient, it doesn’t lend itself to every cocktail due to its rich flavor profile. Unlike refined sugar or corn syrup, it is more than just sweet. Brands that plan to join this new wave will have to experiment with other sweet alternatives to hit the mark.  

Maple Syrup and Monk Fruit Are Making Things A Little Sweeter  

  It turns out maple syrup is just as good in a cocktail as it is on a warm, delicious stack of pancakes. You may have heard of or tried maple syrup-infused still and sparkling water. If you add a little gin, some lime and ice, it’s a drink worth singing about. (You can thank us later for this DIY cocktail.) There are numerous cocktails made to order with maple syrup, drinks you can make right at home. Beverage companies looking to pivot will most likely take a few of your favorites and turn them into simple, clean, ready-to-drink cocktails. For example, an Apple Sour is just as simple to make as the Bee’s Knees cocktail if you have Calvados, lemon juice and maple syrup. Another easy-to-make cocktail that marries well with this decadent sweetener is an Old Fashioned.  

  Monk fruit, also known as Luo Han Guo, a natural sweetener originating from Southeast Asia, is a new replacement for stevia in protein powders, meal replacement and energy drinks. It’s de-rived from dried monk fruits. Monk fruit extract is ideal for individuals on a low sugar or carbo-hydrate diet since it contains zero sugar or carbohydrates. It boasts antioxidant and anti-inflammatory properties. This ancient fruit, harvested and cultivated by monks in the 13th centu-ry and first used for traditional herbal medicine, can be found in beverages such as the Slightly Mighty, a low carb 95 calorie beer infused with monk fruit.   

Leveling Up – Health Conscious Imbibing  

  Whether it is honey, maple syrup or monk fruit, there are better options to sweeten alcoholic beverages. What will determine the success of a health-conscious beverage is for producers not simply to replace refined sugar but craft drinks that complement this alternative. Alternative sweeteners come with nuances that may either create the perfect blend or overpower other ingre-dients. Some people have described the aftertaste of Monk fruit as bitter, and honey is derived from many sources: manuka, wildflower, buckwheat and sourwood, to name a few. The flavor profile and depth of sweetness vary with each. The same can be said of maple syrup, which can have a rich, robust caramel or honey-like fruity taste.  

  These are not the only natural sweeteners that consumers will find in their canned cocktails. Agave nectar, molasses, coconut sugar and even dates will be infused into the next wave of clean canned alcoholic beverages. Date syrup is already shining bright as a deep and rich sugar re-placement in cocktails. Not only is this tropical fruit a great source of fiber, vitamins, minerals and antioxidants, but it also scores lower than honey and maple syrup on the glycemic index. 

  Some brands take it a step further and clearly label the ingredients on the front of the can so con-sumers won’t miss it. Although refined and simplified ingredients are making headway, it re-mains a niche market against headlining brands that hold a loyal consumer base despite un-healthy additives or sweeteners.  

  With that said, simplicity lends itself to cocktail making, allowing mixologists to move away from fancy frills or adding too much in favor of a little less. The best drink served doesn’t have to be the loudest in the room, but it certainly could use a little honey.   

The Best Approaches for Safety in the Brewery and Distillery

By: Alyssa L. Ochs

As a craft brewer or distiller, it’s easy to get caught up in the day-to-day operations of the beverage production process. After all, from securing supplies to marketing products and everything in between, there’s a lot to keep in order.

  Among the many competing demands, safety sometimes gets taken for granted or overlooked. However, it’s essential to always keep safety on the radar and on the minds of staff. Beverage producers can benefit from a little refresher on safety to protect their valuable workers while also maximizing efficiency and productivity.

Safety Hazards in Breweries & Distilleries

  Because of everything involved in the brewing and distilling processes, many things can go very right or very wrong depending on how operations are run. Various hazards exist in a beverage production facility that workers need to be aware of and trained to address.

  Injuries can occur due to lifting, pushing and carrying equipment or because of falls on slippery floors. Working at tall heights and on ladders can cause injuries, while clutter left behind on floors and in confined spaces can cause tripping. Carbon dioxide gas, boiling liquids, steam, hot surfaces and not being properly trained to use machinery pose hazards. Other causes for concern are flammable chemicals, broken glass and grain dust exposure. Meanwhile, repetitive movements without good ergonomic tools can put employees at risk, and high noise levels can cause ear damage.

  “All semi-finished and finished products are flammable, so proper engineering and procedural controls must be designed, installed and tested, and all staff trained on these controls and procedures,” said Rich Buoni, founding owner of Pennsylvania Distilling Company in Malvern, Pennsylvania. Pennsylvania Distilling is a small distillery that produces grain-to-glass vodka, whiskey, rum and gin. Its location offers tasting flights, artisan cocktails, tours and bottle sales in a relaxed environment.

  “As a chemical engineer with significant global experience, it is my opinion that distillery stills should never be direct-fired, as that is simply too intrinsically unsafe regardless of how large the installed base may be,” he said. “Steam, preferably through a vessel jacket or coils, is the best and safest design, although other heating fluids, such as circulating nonflammable hot oil, are acceptable. Electric heating coils are also acceptable but less preferable for a number of reasons.”

  On the brewery side of things, Beverage Master Magazine connected with Chad Gunderson, the president, CEO and head of brewing operations at Half Brothers Brewing Company in Grand Forks, North Dakota. Half Brothers is a family-friendly craft brewery specializing in creating unique beers with innovative ingredients and techniques in a relaxed gathering spot with a taproom, kitchen, live music and local art.

  When asked about the most important safety concerns that brewery owners and employees should be aware of, Gunderson said that “how to properly handle cleaning chemicals, hot water, hose management and cleaning floors” are his top recommendations.

The Role of

Personal Protective Equipment

  Personal protective equipment is vital across many industries, including craft beverage production. Breweries and distilleries should ensure that employees wear the proper clothing and footwear to do their jobs safely and without distraction or hazards. Protection for the eyes, ears and hands should be worn when operating specialized pieces of machinery that can put the body at risk.

  PPE has played an even more significant role in the craft beverage industry due to the COVID-19 pandemic. Depending on where a producer operates and what the ever-changing guidelines dictate, front-of-house staff members who interact with the general public may also need to utilize face masks, face shields, gloves, hand sanitizer and other sanitation measures.

Responsibilities of

Workers and Supervisors

  Ensuring that a brewery or distillery operates in a safe environment starts with good communication among everyone who works onsite. Owners and managers can begin this process by asking employees if they feel safe in the workplace and encouraging them to raise concerns about any potential hazards they have noticed in the facility.

  Buoni at Pennsylvania Distilling Company told Beverage Master Magazine that employee safety training is conducted by him directly. This includes testing equipment controls and safety procedures. 

  “Our safety checklist includes proper use of PPE, fire extinguishers, proper storage of products and chemicals, proper use of pumps and compressors, understanding of peripheral equipment including the steam boiler and chiller, use of any electrical equipment, grounding of tanks and pumps, food processing safety and how to lift objects like grain bags safely,” Buoni said.

  At Half Brothers Brewing, “Each new employee has an SOP manual and exam they must complete before working alone in the building and factory,” said Gunderson.

  The first places to look for safety hazards include the production facility and anywhere open to the public. But don’t forget about behind-the-scenes locations such as the shipping and receiving area or the bathrooms. A safety plan might include briefing delivery drivers and vendors about safety protocols unique to the facility.

Safety Tips for Brewers and Distillers

  Flooring-related slips, trips and falls are among the most critical safety concerns in a brewery or distillery. To ensure that the floors are safe to walk on, spills should be cleaned up as quickly as possible, relevant signage posted, and obstructions moved out of walkways. Obstructions include cords, boxes, bottles, cans and employees’ personal bags. Employees should wear sturdy, closed-toe shoes to protect themselves from broken glass, chemical spills and slippery surfaces.

  Chemical leaks, spills and handling are significant concerns for craft beverage producers because of how dangerous these substances can be when misused. Goggles, protective footwear and safety aprons can help prevent injuries due to chemical exposure. Make sure to clearly label hazardous materials, so employees know to avoid these products or use extra caution when handling them. Ensure proper ventilation in areas where chemicals are used, particularly in small spaces.

  Initial and ongoing safety training is important to prepare employees for potentially dangerous situations and common scenarios that could turn deadly without a moment’s notice. In smaller operations with just a few staff members, it might be necessary to cross-train all employees on the various safety procedures, so everyone is prepared to handle diverse tasks throughout the day. Being proactive with training is always preferable to training in response to an incident. In addition to how to safely use specialized equipment, it may also be beneficial to train employees on first aid, CPR and basic safety tips for seemingly simple tasks like opening boxes and stocking supplies.

  OSHA compliance is required of brewery and distillery owners in order to keep their licenses to operate. Laws and regulations in the alcohol industry frequently change, so producers should keep up with any updates. OSHA is known to show up unannounced to inspect and ensure that safety regulations are being followed. Some of the main things these inspectors look for are cluttered walkways, chemical storage and labeling, keg storage and written records that document training plans, hazard assessments and injury logs.

How to Keep Your

Staff and Customers Safe

  Safety in the brewery or distillery may seem like little more than common sense at first glance, but gentle reminders can go a long way in helping staff members remember what’s most important. Without suitable safety protocols in place, a beverage business could be subjected to extra inspections and incident investigations that disrupt normal operations and put the company at risk of fines or discipline.

  Buoni from Pennsylvania Distilling Company said that his best advice for a new distillery concerning safety is to ensure that they have a solid understanding of the distillation process from beginning to end. 

  “It’s critically important to know how the dots are connected rather than just taking somebody else’s recipe and making liquor,” he said. “Appropriate education is the best answer. For the tasting room, it is really very similar to any bar that serves alcohol to patrons. Having appropriately certified bartenders and servers is key. Staff must understand the uniqueness of a different license class so that all laws are followed.”

  Gunderson at Half Brothers Brewing Company recommends that brand-new breweries thoroughly research the proper chemical training, dosage, time and handling.

  “Clean beer starts at the source of cleaning SOPs,” he said.

  Keeping up with all of these safety requirements and regulations might feel like a hassle, but there’s no way around it if you want to run a reputable craft beverage business. By encouraging a proactive safety culture in your brewery or distillery, you will ultimately attract the types of employees and customers you want and need to stay in business while also letting people know that you honestly care about their health and safety.

Barrels & Racking:

Modern Systems, Historic Preservation and Refurbished Options Producing Optimal Results

By: Cheryl Gray

In 1879, distiller Frederick Stitzel patented a revolutionary method that put a new spin on how barrels for spirits and other crafted drinks are stored.

  Some 150 years later, the practice of racking barrels, also known as ricking, is an industry-standard. Placing barrels on their sides, rather than upright, and supporting them underneath with either timber or metal, increases air circulation and space.  Racking keeps pressure off barrel staves, a problem that Stitzel and other early distillers learned could result in losing a barrel’s precious contents through leakage.

Space to Breathe

  Western Square Industries, headquartered in Stockton, California, has been in business for 43 years and is among the global leaders in its field. The company originally catered to the agriculture and livestock industries, specializing in two main products, steel gates and corrals. Western Square Industries now manufactures a broad range of barrel racking systems for distillers, breweries, wineries, meaderies and cideries. It serves clients across the United States, with a significant client base in California, Texas and the Eastern U.S.  

  President and CEO Trygve Mikkelsen took over the company in 1993 and quickly recognized its potential in manufacturing barrel racks. Mikkelsen told Beverage Master Magazine about one of the company’s most popular barrel systems for distillers expanding their operations.

  “The Barrel Master is our most popular model for distilleries in growth since the user can mix and match sizes of barrels in a safe forklift-able stacking system. The Barrel Master can also be bought with the barrels sitting on wheels for easy rotation if desired. This is possible because there is no weight on each barrel.”

  The Barrel Master 30/53 allows barrels ranging in size from 30 to 53 gallons to be stored on the same rack. The rack-on-rack design allows barrels to be more visible and accessible. There is also the opportunity to stack barrels higher without compromising stability. An optional wheel design provides 180-degree barrel rotation in either direction. Unlike other systems, which are more like pallets between barrels and require a uniform barrel shape and size, Mikkelson said Barrel Master’s rack-on-rack function eliminates any barrel putting pressure on another below. The rack also features a storage-saving design in that it can be nested into a stack when empty.  The racking system is manufactured from stainless steel and is available in several color and coating options.

  Mikkelsen said breweries and distilleries also use his company’s seven-inch two-barrel racks and another product known as Big Foot. Sometimes, Mikkelsen said, full access is less important than space.  In that case, clients choose the company’s low-profile rack, known as two-barrel four-inch racks.

Tradition and Preservation

  While newly established distilleries may look to modern-day solutions for ricking, the name Brown-Forman evokes a history like no other, including that it is the only distillery company in the world to make its own barrels, which are stored in a range of distilleries, some with warehouses and barrel ricking systems dating back to the late 1800s.

  When a young Jack Daniel first learned the art of making whiskey under the tutelage of a soon-to-be ex-slave-turned-master-distiller, Nathan Nearest Green, neither could have imagined that the whiskey created would become synonymous with the tradition and preservation of some of the most historic distilleries in the world. Brown-Forman is the keeper of that tradition, in the form of four distilleries, three in Kentucky and, of course, the Jack Daniel’s Distillery in Tennessee. 

  With some 130 years of warehouses spread across four distilleries, the barrel ricking found in any given Brown-Forman warehouse depends upon many variables. Chris Morris, Woodford Reserve Master Distiller for Brown-Forman, explained that while a modern distillery can install all one type of ricking, the historical distilleries of Brown-Forman have operated on a different premise.

  “The date of construction for the numerous warehouses at our distilleries ranges from 1890 through 2020.  Needless to say, this means we have many types of barrel rick material, from wood to metal. Within those two groups, we find different types of wood and metal in use over the years. That depends on the era an individual warehouse was constructed and who built it. We also have some palletized storage as well as floor dunnage. The Woodford Reserve Distillery, for example, has warehouses with wooden ricks and others with heavy iron rails. Woodford also has some palletized space and floor dunnage. 

  “While our ricks are made of various materials, they are all using the same design that was patented in 1879: the ‘open rick’ design. Now, this again will vary in length and height, based on the size of the warehouse. Some wide houses will have a rick that holds 31 barrels, while others may only hold 11 due to the narrow width of the house. Most of our warehouses have ricks that are ‘three high’ or have three tiers of ricks.  However, we do have one house that has ‘six high’ ricks. Still, the design doesn’t change.  When our cooperage makes a barrel for a distillery, like a Woodford Reserve specific barrel, it doesn’t know which warehouse it is going to be entered into, so that barrel has to fit in every warehouse’s ricks.”

  When it comes to proper storage, Morris said, some things never change. “The proper storage for a barrel in the rick is simple. Rick it with the bung in the 12 o’clock position to minimize leakage. If a barrel already has a leak, rick it with the leak point at 12 o’clock. Otherwise, it is the condition of the warehouse that is important, rather than how the barrel sits in the rick.  We want clean, dry conditions in the warehouse.”

  Morris also said that there is no need to rotate barrels if there is good inventory control, along with batching barrels together to make a consistent flavor profile. A barrel matures based upon warehouse temperatures and the length of time the barrel spends in the warehouse, not by how it sits.

  “There has been a tremendous amount of study conducted on the impact temperature has on the maturation process,” he said. “Brown-Forman has research papers that date back to the 1920’s – we operated during Prohibition under medicinal permit KY—3. Based on these many studies, we never allow our Kentucky warehouses to drop below 55 degrees Fahrenheit in the winter. This requires that each of our warehouses be constructed with thick masonry walls so they can be heated as necessary. They will get as hot as they will in the summer because they can’t be cooled. Jack Daniels has ‘iron clad’ warehouses, so they can’t be heated and will, therefore, get cold in the winter. So, Brown-Forman matures its whiskies across a variety of maturation styles.”

Reusing Resources

  Menomonee Falls, Wisconsin, is home to The Barrel Broker, co-owned by John and Kathleen Gill, who started the business 11 years ago in California. The company sources and supplies used barrels and racks for breweries, wineries and distilleries. While its clients are primarily in the Midwest, The Barrel Broker also has business overseas.  The company’s customer base prefers barrels freshly emptied and slightly wet. A lot of that barrel stock comes from bourbon distilleries which, by law, can only use a barrel once for bourbon.

  Accordingly, The Barrel Broker has some insight to share on how to store barrels and what its customers prefer when selecting used racks. John Gill, who has a background in the wine tourism industry and heads quality control for the company, said that for his clients, choosing a racking system really comes down to need, preference and budget.

  “Racks are designed to safely store barrels two wide and up to five stacks high while being able to be moved with a pallet jack or forklift. The seven-inch racks allow ample space to access the bungs while stacked for pulling samples or topping off.  We suggest used, refurbished or new two-barrel racks in three-to-seven-inch sizes.  We sell them all for barrels, 15 to 60 gallons.” 

  Gill agrees with other experts, such as Morris, who say that barrels don’t need to be rotated. He told Beverage Master Magazine that he also believes that keeping the proper temperature in a warehouse is key to a successful product outcome from any barrel.

  “Ideal for breweries is high humidity, 60% to 70%, and cool temperatures to minimize evaporation loss. Ideal for distilleries is a continuous change of temperatures and humidity to achieve complex flavors and complexity in barrel-aged spirits.”

  Price and preference dictate what racking systems a brewery or distillery may choose. However, experts agree that controlling warehouse temperature, avoiding undue pressure on barrels, and keeping tabs on inventory control produce the best results.  Whether wood or metal, racking is a matter of knowing what will stack up as the best outcome for the product inside a barrel.

Mixology Mishaps:

How To Turn Negative Online Reviews into Successful Sales

By: Chris Mulvaney, President (CMDS)

Sticks and stones may break our bones, but words will never …hurt us? Wait, never mind.  In the craft beverage industry, words can do damage, especially online where your reputation is always one Google search away.

  Facebook, Yelp, and Google are the three most-trusted review sources for local searches.  Reviews on these sites matter.  The way that your business treats a negative review can tell your customers a lot about you.  So, if you do happen to receive one, you need to act fast.

And while you are no doubt used to handling the difficult customer in person, social review channels are open for all to see, and negative comments can reflect poorly on your craft brand and, ultimately, cost you sales — right?  Well, yes and no.

  Yes, if you don’t manage your negative comments properly, then it could be bad news for your revenue stream. However, there are ways to offset negative reviews. And, if you respond the right way, you can turn those negative comments around and avoid having a damaging social media mishap.

  In fact, you can leverage them to actually improve your conversion rates, “boost” your sales, and ultimately create success for your craft beverage brand.

Create a Game Plan

  Before you take any action on a review, you should always have a game plan in place. That way, your social media presence remains consistent across all review platforms.

  Look at it this way: think of each negative review as an opportunity to show your customers that you care.

  Here are some game plan directives to put into place:

1.  Don’t Ignore Them or Be Defensive:  Hearing someone criticize your business hurts. It can be tempting to close your browser every time you read a bad review, or, even worse, to respond with a cutting retort, but burying your head in the sand or exhibiting online “road rage” isn’t going to solve anything. Instead, come up with the right response. Address them by name. Humanizing your approach will demonstrate your brand ethics. Make sure that you remain genuine. Don’t answer with an auto-reply. Take the time to actually investigate each issue. Don’t debate the validity of their statements, argue, or respond in an aggressive or combative way, even if you don’t agree. Arguing with a dissatisfied client online makes their original complaint seem more valid, and worse, it never makes you look good.

       Instead, thank the reviewer for their feedback and offer a sincere apology for their experience. You don’t have to take responsibility, but do show empathy.

2.  Respond as Quickly as Possible: It is vital to respond to negative comments as quickly as you can.  Doing this will give you a better chance to salvage those bad reviews. Each minute matters on social media because everyone has real-time access to it.

       To help you manage your social media responses in a timely manner, it’s best to hire an agency. They can assist with implementing tools so you are alerted in real-time whenever you receive a comment on one of your channels. You can quickly resolve any issues and prevent significant customer loss.

3.  Really Make the Effort to Solve the Problem: Making something right will also show potential customers that you are completely committed to ensuring satisfaction.

       In addition, many reviewers will go back and post their experience if it turns into a positive one, and every positive review takes the sting out of a negative one. Highlight these experiences so customers see that you care about the outcome.

4. Keep it Real:  An imperfect, but pretty strong rating appears much more believable to customers than having a perfect record. Unblemished reviews can look “fake” and more untrustworthy than their blemished counterparts. In a nutshell, negative reviews provide some honest feedback on your craft beverage product or service and can mix in nicely with the positive commentary.

Leverage Other Business’s Negative Experiences

  As the saying goes, a person who learns from other people’s mistakes is a wise person. And leveraging other people’s negative experiences can offer many benefits.

  Learning from others by doing your research helps you avoid the same obstacles.

  For instance, here are some top online customer complaints about various craft beverage establishments swirling around social media right now:

●    Place not open as advertised/Website not updated/Hours not listed.

●    Want a bigger pour for the price.

●    Employees are rude/non-compliant with safety.

●    Tour was longer than it stated.

●    Not clear about rules (kids, food, etc).

●    Not enough offerings/limited selection.

●    No Flight Layout (for breweries).

  All of these comments boil down to the same two issues: Online presence and customer communication.

  You know what takes to manage your business and your inventory. And, with the popularity of craft beverage businesses, there is a steady stream of new customers. Some patrons, used to a different type of establishment, or ones who are simply impatient when it comes to being served at a busy place, offer a different level of frustration.

  To counteract this, make sure you take notice of negative reviews from similar businesses to limit having the same thing happen to you.

  Here are some counter-acting responses to the above examples:

●   Always keep your website and hours of operation updated. Do you require reservations or are you first come, first serve? Do your hours change with the seasons? Close for private parties? Planning these updates in advance and keeping your business information up to date ensures you do not get disgruntled customers who are more likely to chalk up their “bad” experience through a negative review.

●   Be CLEAR with your pricing, online and in person. Be transparent about promotions and their start/end dates. State whether sales tax is or is not included. Be open about the size of your pour. Being transparent can avoid any unwelcome surprises.

●   Train your employees in the art of customer service. While you know there will be times when it will get busy and your staff may get pulled in different directions, the customer should always be treated in kind.  Consider security cameras to give peace of mind to both the customer and the staff so that any situation can have an objective eye.

●   Be aware of the most up-to-date safety and cleanliness measures. Make sure your business adheres to them to keep everyone as safe as possible all round.

●   If you provide tours, state when your tours begin and finish. If they can be more lax, state that too. Make sure this is stated online and in person.

●   Let your customer be prepared before they come to your business on what your rules are by posting them and in your place of business. Do you have a food menu or do you use a trusted vendor? Are kids allowed? Is there an “Adults-Only” area? Tasting rules? Your menu and offerings should be clearly stated online and in person. Make sure to keep this updated. Are you a brewery with a flight menu? Let them know either way. Some things cannot be avoided (such as running out of a flavor or not being able to offer growlers) … try to keep up on this as much as possible. Mention it on social or display it on a board at your business.

  You will always have to take the good with the bad, but the more you know, the more you can prepare for.

  It’s True: Those Bad reviews Can Actually Improve Your Sales. Believe it or not, bad reviews have the power to improve your sales and conversion rates, too.

  As previously mentioned, if your business gets only positive reviews, consumers might question whether those reviews are legitimate.

  Since nobody is perfect, having a healthy mix of both positive and negative reviews will help customers view your business as more trustworthy. Most customers actually expect negative reviews on your site, and if they don’t see them, they think your reviews are fabricated.

  And, when there are negative reviews mixed in with the positive ones, that reduced skepticism will add to your brand’s authenticity.

  For that reason, it’s important not to delete your negative comments on your social channels because they can actually work in your favor by making the positive comments that much more credible.

The Last Gulp

To recap:

●   Create a uniformed GAMEPLAN.

●   Use other competitors’ negative review experiences to improve your brand strategy.

●   Leverage negative comments to drive beverage sales and conversion rates.

  That’s why it’s important to hire the right agency to manage your online presence with these initiatives and more. Doing so ensures that you uphold a valuable asset – your business’s reputation, without taking away from your valuable time.

  All in all, your social media strategy in how you respond to negative comments can flip the unsatisfactory customer experience on its head, turning them into positive sentiments and increased sales, resulting in the happy sound of clinking glasses.

  Chris Mulvaney is a business developer, entrepreneur, and an award-winning creative marketing strategist. His extensive professional background includes working with some of the world’s leading brands – and personally helping clients refine their corporate vision and generate the kind of eye-popping results that too many companies only dream about. Visit… cmdsonline.com

Houston Cider Company

Putting Cider on the Map in Texas  

By: Nan McCreary

Keep in the heart of Texas, far from the apple orchards of upstate New York or the Pacific Northwest, a Houston urban cidery is introducing locals to one of the joys of that age-old beverage that many consider the drink of the future: hard cider.

  Houston Cider Company, founded as a brewery in 2015 by two young scientists, geologist Steve Macalello and chemist Justin Engle, offered Houstonians their first locally produced cider in 2017.  Today, the cidery, located in the trendy Houston Heights neighborhood, is the only just-cider facility in the city and a hot spot for regulars who live in the area, as well as those who travel miles “because I heard I have to try your cider.”

  “We aren’t even scratching the surface of what Houston can consume,” Macalello told Beverage Master Magazine.

  Macalello’s cider is increasingly popular due to the demand for gluten-free drinks and low-alcohol beverages. “Cider is strongly associated with beer — they’re packaged similarly, as opposed to wine — and people are looking for a beer alternative. And the fact that our cidery is made locally really appeals to people.”

  Macalello and Engle began their operation as Town in City Brewery. “When we started, there were fewer than a dozen breweries in Houston,” Engle said. “Now there are 80-some. In the beginning, we designed our facility so we could have add-ons, and when we saw a lot of customers wanting something other than beer, we decided to add cider.” 

  By 2018, the two were splitting production between beer and cider, but as they saw the demand for cider growing, they pulled the plug on beer. The decision appears to be a good one. Today, the Houston Cider Company services over 300 accounts in Southeast Texas, including Spec’s Wine, Spirits & Finer Foods, Total Wine & More, Whole Foods Market and H-E-B. The cidery has also won multiple national awards for its products.

  As an urban cidery, Houston Cider Company can’t juice on-site, so they rely on suppliers from the Pacific Northwest to provide high-quality fruit for on-site fermentation. Their ciders are a blend of culinary apples for sugar content and cider apples for flavor. Botanicals, herbs and spices — added either during or post-fermentation — are all-natural and, as much as possible, sourced locally.

  While Macalello works behind the scenes managing marketing and social media, Engle and assistant cidermaker and archeologist/geologist Olivia Fry are on the front lines, actually making the cider. Their philosophies are similar. “Our ciders are very traditional,” Engle said.  “We make them as clean and crisp as possible. We take a wine-making approach. We play with the yeast, but we choose yeast that doesn’t have the esters and phenols that some people are looking for.”

  Fry agreed. “We want our cider to be flavorful but all-natural. When we came out with our Houston 75 — based on the classic French 75 — we tried to do something different by using different yeasts and adding fresh lemon peel instead of processed sugars to get the flavors we wanted.”

  With their backgrounds, the cidermakers are very science-driven. “We like data,” Engle said.  “We’re always looking at data and methods of improvement. The more data we can collect, the better we’re able to predict fermentation timelines based on pH. We can measure down to the millimeter. Sometimes one additional peppercorn can make or break the cider.”

  At the top of Houston Cider Company’s product line is the Core Four: ciders based on high-quality apple juice from the Pacific Northwest. The Core Four starts with Dry Cider, a 2019 U.S. Cup Cider Bronze award-winner, with flavors similar to a white wine with green apple. Next is the Cherry Cider, made with Montmorency cherry juice from Michigan, and a 2019 Cider Craft Double Gold award winner. Rosé Cider, featuring organic rose buds and Jamaican hibiscus flowers, won the 2019 Cider Craft Silver award. Finally, Pineapple Ginger is made with pineapple juice from Hawaii and freshly cut ginger. All are 6% alcohol by volume with no sugars added.

  Additionally, the cidery releases a new small-batch cider every week through the taproom and on the website. “These are more fun flavors that incorporate botanicals or herbs or off-the-wall stuff,” Macalello told Beverage Master Magazine. “This allows us creative latitude to have fun with ingredients and see what they can do. If the customers like them, then we will put them on the market.”

  These ciders include unique combinations such as Tea for Victory, fermented with an Earl Grey Black Tea blend and back-sweetened with organic agave nectar from Jalisco, Mexico, and Passion Fruit Hibiscus Cider, made with hibiscus from Jamaica and passion fruit from Mexico. Most recently, the cidery released South Coast Hopped Cider, a big, bold cider with assertive hop flavors and subdued bitterness. “This is a great cider for people who love beer but are sensitive to gluten,” Fry said. “It’s the next best thing to a beer.”

  In 2019, the Houston Cider Company produced between 875 and 1,000 barrels of cider. To meet the increasing demand for their product, Engle and Macalello added new 4,500 gallon tanks and a canning line capable of filling 40 cans per minute. But then Covid-19 hit, and the company had to cut back on production and close the taproom. Not to be deterred, and looking ahead to the post-Covid world, they’re gearing up for a major expansion. “Right now, all of our product stays in Houston because we don’t have the capacity to expand,” Macalello said. “But 2021 will be a good year. We just installed two 120-barrel tanks and plan to add another one. There are dozens of stores that need products, so we hope to triple our growth this year.”

  In the meantime, the cidery is selling their cider to-go and taking their products to farmer’s markets. Soon, they hope to reopen their taproom, which can accommodate 30 people, and their pet-friendly patio and garden area. They also hope to bring back events, which they used to hold quarterly. In the past, they’ve hosted a crawfish boil and a tiki night with tiki-inspired ciders accompanied by a pig roast. They’ve also participated in White Linen Night in the Heights, an annual street festival originating from a centuries-old New Orleans tradition where people wore all white to lessen the effects of the sun.

  Last year, the Houston Cider Company formed a partnership with Bee2Bee Honey Collective, where the cidery made honey sourced from six different Houston neighborhood apiaries, each yielding different flavors of honey. Customers could vote for their favorite honey cider, with the cidery giving the winner a $500 donation to distribute to organizations in that neighborhood working on bee-friendly projects. “We hope to do this every year,” Engle said.  “We really enjoyed partnering with Bee2Bee and educating our neighborhoods.”

  As Houston Cider Company looks to the future, they will continue to create modern American craft ciders with a focus on fresh ingredients, but expect some surprises. “Our approach to cidermaking is traditional, but in terms of flavor, the sky’s the limit,” Engle told Beverage Master Magazine. “I like to cook at home and have all these flavors in my head, so I make ciders that have more flavor components than just apples.”

  Their game plan also includes using more local ingredients, whether buying herbs from local farmers or even growing their own. Fry, for example, started a garden in her backyard and may produce some herbs in bulk for the cidery.

  As we emerge from the Covid-19 pandemic, research indicates that we can expect to see more and more innovation from cideries like the Houston Cider Company. Cider is one of the fastest-growing segments of the liquor industry, and today there are over 900 cideries spread across the country.

  As Houston Cider Company says on their website, “We believe cider is for everyone, and that it is best enjoyed with good friends, great food, and high spirits.” That pretty much says it all.

  To learn more about Houston Cider Company, or to buy its products, visit https://www.houstoncidertx.com.

2021 Beverage Trends

By: Tracey L. Kelley

No producer wants to feel like their business is simply dictated by trends and not backed by individual vision and a solid plan. However, if 2020 taught us anything, it’s to be strategic, targeted and, most of all, flexible.

  To understand what consumers want in 2021 and beyond, Beverage Master Magazine gathered some trend data and talked with Holly McHugh, marketing associate for Imbibe, a beverage development company focused on the formulation, customization and commercialization of cutting-edge beverage products that provide a “bolt-on R&D function” for companies without R&D or that need to expand in this area.

So—What’s New?

  Taking stock of the past year and establishing aspects of revision is still a personal and professional journey. Still, maybe some of these indicators will resonate as either extensions of current practices or sparks of innovation.

People are Eager for To-go and Online Options

  “The pandemic changed the way we shop, socialize, entertain and more,” McHugh said. “This created a need for CPG (consumer packaged goods) brands to offer products that provide an escape from the mundane but can be enjoyed at home.”

  In December 2020, Forbes reported that “total eCommerce penetration experienced 10 years of growth March through May 2020.” It cited research from IWSR that stressed “online sales of alcohol in the U.S. alone are expected to grow by more than 80%” in 2021. The IWSR analysis indicated that “beverage alcohol eCommerce value grew by 42% in 2020,” and the forecast is that the U.S. will overtake China “as the world’s largest beverage alcohol e-Commerce market by the end of 2021.”

  Quite simply, customers are fond of the convenience and expanse of options online ordering provides. In major and secondary market areas, consumers use platforms like Drizly to browse various selections and receive their purchases within 60 minutes. Many local producers also have access to DoorDash and other delivery services, regulations permitting. “Ghost bars” — extensions of virtual or cloud bars or restaurants often accessed only through third-party delivery services — also saw an increase in consumer interest as producers found new ways to lower overhead but expand product offerings and brand awareness.

  Do-it-yourself kits, mixology classes, premium bar selections, unusual or over-the-top experimental selections and other experienced-based offerings continue to drive consumer interest in 2021. They also still desire personal connections with makers.

Non-standard Products Continue to Rise

  Hard seltzer, cider, tea, kombucha and beer tap into consumers’ desire to balance healthy libations with beverage-driven exploration.

  For example, pandemic purchases of hard seltzer, in particular, rose significantly in 2020, moving beyond previous limitations of seasonality, and there’s no stopping point yet. Nielsen reported that “Hard seltzer-correlated ready-to-drink cocktails drove $120 million in U.S. off-premise sales in the 52-week period ending June 2020, while growing at a 127% rate compared with the previous year.” That growth, Nielsen states, “opened the doors to an even broader array of new and bolder flavor options accompanying the base liquid, and it’s allowing manufacturers to expand the limits of what ‘hard seltzer’ means.”

  Zero-proof spirits, especially those enhanced with adaptogens – herbal substances that promote wellness – botanicals and CBD also have growth potential.

  As regulations shift, CBD- and even THC-infused products are positioned for a meteoric rise, according to a 2020 report by Grant View Research. “The global cannabis beverages market size is expected to reach USD 2.8 Billion by 2025 at a CAGR (compounded annual growth rate) of 17.8 percent.” While some consumers might opt for THC’s “therapeutic effects along with the euphoria it provides,” Grant View Research indicated, people consider CBD products differently.

  “Lack of psychoactive effect in the CBD drinks is widening its scope for usage of the drinks in medical purposes. Many consumers are considering CBD drinks as a wellness and anti-inflammatory products, such as kombucha, a probiotic drink. This drink can potentially be used for treating chronic pain, anxiety, substance use disorders and central nervous system diseases. These factors are expected to boost the adoption of the product, resulting in the growth of the segment,” the report outlined.

Health is Front and Center

  “Since the onset of the pandemic, improving physical and mental health has become a top priority for consumers,” McHugh said. Imbibe’s trendspotting indicated a sharp uptick in non-alcoholic wellness beverages and other forms of “permissible indulgence.” While this doesn’t seem to align with alcohol initially, it presents opportunities to consider communications and branding that acknowledge aspects of a healthy lifestyle.

  Spirit-forward classics, which celebrated resurgence in 2020, aren’t slowing down in the new year and might provide another way to acknowledge the balance of responsible consumption that focuses on taste and experience.

  Combating stress with beverages, otherwise known as mood boosters, that allow for clarity, relaxation and sleep is another trend for 2021, similarly to non-traditional offerings.

There’s a Greater Awareness of Ethical Practices and Cultural Appropriation

  In addition to a greater interest in immunity and mood-boosting beverages, McHugh said there’s an increased demand for global products and flavors — with a caveat.

  While culinary tourism is at a high, panelists at Bar Convent Brooklyn last fall stressed that consumers would continue to share dollars and social media influence with businesses that are more progressive when addressing workplace inequalities, sexism, racism and other societal concerns. They want inclusion and diversity, but from the originators. For example, tiki bars are replaced with nautical or tropical themes; an introduction to popular new tequila includes cultural history from someone in the Latinx community; and a closer examination of whether the producers’ table includes people of color and women, especially when it involves other rising spirit trends such as sake, soju, South American spirits and Japanese whiskey.

Value and Safety Still Prevail

  While this really isn’t a surprise, it’s simply a reminder that we can’t move into what was once normal just yet.

  “Economic uncertainty created demand for value, which we anticipate will be evident through increased sales in multi-use and multi-pack products and private label innovation,” McHugh said. “Safety is something we always think about in the industry in the sense that we don’t want to sell a product that could be dangerous to the consumer, but concern about safety has been heightened by the pandemic. Consumers are purchasing groceries online now more than ever, paying closer attention to product packaging and checking what safety precautions food service establishments are taking before eating out or ordering in.”

Up Your Consistency and Repeatability Game With Quality Testers and Meters

By: Gerald Dlubala

Testers, meters, monitors and probes make it possible for craft alcohol producers to raise their standards and improve their craft. The overall move from older, unreliable, visual-based testing to greater process control with more accurate and precise analysis means repeatable sample measurements and more product consistency for reporting purposes.

Quality Control and Analysis at Your Fingertips

  “Measurement and meter use within the distillery are critical for quality analysis and quality control,” said David Zavich, Applications and Technical Support Manager for Mettler Toledo. Mettler Toledo is a leading provider of precision instruments and research and development-related services, quality control and production across numerous industries.

  “At the very least, the distiller should possess a quality pH meter and density meter for help in making informed decisions throughout the production process, and know if and when to intervene and make any needed adjustments. The best way for a distiller to know when the mash is within the acceptable pH range – 5.2-5.8, 5.4 being optimal – for the enzymatic activity to convert starches to sugars is with a quality pH meter. It also helps monitor the critical fermentation activity of a distiller’s beer, when pH should decrease to 4.0-4.5 as yeast metabolize ammonium ions and excrete organic acids. A pH remaining above 5.0 indicates a lack of activity, and pH below 4.0 may indicate the presence of undesirable bacterial contamination.

  “Benchtop density meters are invaluable for determining the proof and quantity of distilled spirits for TTB reporting purposes,” said Zavich. “Handheld versions can determine mash extract efficiency before fermentation, measure distiller’s beer to ensure fermentation is complete, calculate alcohol by volume, and measure proof during the distilling process that aids in making cuts.

  “To measure density, the distiller has three available options,” said Luke Soposki, marketing specialist for Mettler Toledo’s Analytical Chemistry division. “They can use a hydrometer, which is inexpensive and offers several industry measurement scales, but they are fragile, dependent on the user for results and have longer measurement cycles. Pycnometers are also inexpensive and can achieve a level of accuracy, but they require a higher level of training and have limited measurement scales available. The best choice is a digital density meter. They are more expensive but easier to use, more consistent and reliable, and have a shorter measurement cycle. They cover a wide density range, have automatic temperature compensation, and are available in a variety of models to meet the specific needs of the distiller.”

  “Density meters are quite durable,” said Zavich. “Benchtop units are quite self-sufficient with a suggested yearly preventative maintenance. They have an expected lifespan of around 10 years, but we’ve seen operational units well beyond that mark. Handheld units have no specified terms of use but are equally self-sufficient and expected to last many years under normal use.”

  “The main thing is to ask questions before purchasing,” said Soposki. “Mettler Toledo offers a full suite of testing solutions that include density meters, refractometers, titrators, spectrophotometers and pH meters. We can also talk about automation and multi-parameter options when needed. Distillers’ needs are always evolving, and we know that they are still looking for an easier way to release product after testing, specifically with TTB approved handheld density meters. Ask specific questions about the instruments related to your process applications. Ask for a demo, either onsite, virtually, or even in a try-and-buy program when available. Look for manufacturers that can support you across your business needs and offer service and support beyond just the equipment purchase.”

All in for Peace of Mind

  Or, you could go all in and buy the Rudolph Research Densitometer, the same machine that the TTB uses to send off samples for auditing. That’s what Greg Pope, Master Distiller of Missouri Ridge Distillery, did when he opened his distillery in Branson, Missouri.

  “It was pricey for sure,” said Pope. “At the time, it was a huge investment, around $6,500, plus another couple of thousand in training costs. It easily outpaced the cost of other densitometers, but it’s the one piece of equipment I thought was worth it based on time value savings, and in our case specifically, the frequency of the breakage factor of common hydrometers. I use it every day for my spirits as well as my beers, so for me, it’s a quality investment.”

  Accuracy and repeatability are always priorities in the distillery, and Pope told Beverage Master Magazine that he’s tried all the gadgets, getting hands-on experience at American Distilling Institute conferences and conventions. With the Rudolph Research Densitometer, he proofs a barrel in 25 to 30 minutes versus the 24 to 36 hours needed using traditional proofing methods.

  “When I got audited, and the agents saw that we have the same equipment that the TTB uses, we were already in favorable standing for trying to do the right thing,” said Pope. “This one piece of equipment holds all of our historical data that is time-stamped, properly labeled as tester batches, bottling runs, etc. and is transferable to a thumb drive for easy auditing. It’s designed for upgrading rather than obsolescence, saving money in the long run. We added the refractometer package when it came available for true and corrective proofs on our line of cordials.”

  Pope said that the training was an intensely monitored, two-day affair, but by the end of those two days, he was comfortable using the equipment for all of his applications and performing all necessary tests independently.

  “The only hiccups I’ve had with this equipment has honestly been because of human error,” said Pope. “Our machine is set to give us a recalibration reminder every Monday at midnight, and we can’t do any further testing until that recalibration is completed. The process is easy, and then we’re good to go for another week. This densitometer also has international settings, and because we export our bourbon to the U.K., we can provide their required test results.”

  Pope said that he also helps other distillers by testing and auditing their samples, providing another way to grow and support the distilling community.

Quality H2O: Good Water Equals Good Beer

  “That’s what brewers will tell you, and it’s certainly a good rule to follow,” said Mike McBride, marketing, IT and social media manager for Industrial Test Systems, a leading American manufacturer of instruments and chemistries designed to test water quality parameters. “It’s just a fact because beer is over 90% water, so it follows that good water makes for good beer.”

  Industrial Test Systems offers their popular eXact iDip Smart Photometer and their eXact pH meter to help brewers stay on top of their water parameters.

  “Visual testing only gives the end user a baseline guide or range versus digital testing that is much more precise and provides exact, repeatable results,” said McBride. “Our meters bring those types of laboratory quality results to you, and that’s important because of the many different tests performed on the water within a craft brewery. One example is testing for water hardness because different beers require different levels. Dark beers require harder water, while lighter beers use softer water. You have to have an accurate, quality test to determine what type of water you’re using.”

Brix and pH Meters: A Brewer’s Best Friend

  “Measuring pH and Brix levels in brewing is essential,” said Jason Brown of Milwaukee Instruments. “Both units are a must because those measurements ultimately determine the type of beer you will brew, how the flavor will turn out, and what percentage of alcohol the brew possesses. To measure alcohol content with a meter like our MA871 digital Brix refractometer, you take an initial Brix reading of the unfermented wort and then a follow-up reading once fermentation is complete. Those values are plugged into a conversion chart to determine the percentage of alcohol in your final product. Taking pH readings on a meter like our MW102 within the brewing process takes place from the beginning of the brewing process to the end, using it for multiple applications and processes.”

  Brown told Beverage Master Magazine that brewmasters typically already have basic knowledge of pH testers and refractometers. Still, even if they are new to the game, Milwaukee Instruments provides user-friendly equipment, with complete YouTube tutorials instructing the user on the operation, maintenance, storage and calibration of the meters. Most units come with a two-year warranty on the base unit and six months on the electrodes. Their bench meters offer data logging that is an advantage over comparable handheld units.

  “It’s recommended that both types of meters be calibrated before each use to maintain accuracy across all samples tested,” said Brown. “Our units can be calibrated by the end-user with no issues.”

Steam & Water Flow Measurement: Going with the Flow

  “Given the need for accuracy, consistency and repeatability, brewers should always choose the highest quality meter they can afford,” said Marc Bennett, regional sales manager for McCrometer, Inc., worldwide providers of precision flow meters for liquid, steam and gas applications. “Flow metering is all about optimizing production to give the brewer consistent and reliable results through understanding the precise temperatures, pressures and flow being used.

  “The best way to measure steam is through equipment like our V-Cone Meter. It helps a brewer understand the precise temperature, flow and measurement of their team processes, allowing them to optimize their consistency,” said Bennett. “We know craft brewers are frequently tight on space, so our V-Cone Meters are designed for tight fit and retrofit applications while handling most operating environments. Some of the largest, most well-known breweries use V-Cone meters for steam measurement, but they are very applicable for smaller brewers as well.”

  McCrometer also offers a line of electromagnetic flowmeters (MAG) for accurate water flow measurement. Their pumps rely on velocity and pipe diameter information to determine flow over wide ranges with high precision accuracy. Their SPI MAG measures everything from in-flow water through wastewater, including industrial flow processes involving potable water, slurries, sludge, cooling water and pulp stock.

  “Whatever the choice, brewers should always choose U.S. manufactured meters,” said Bennett. “U.S. manufactured meters are often more readily available and more quickly shipped than the non-U.S. manufactured counterparts. If you choose a high-quality meter with a long lifespan and U.S.-based support, you’re getting a great return on your investment. The last thing you need or want is to have your brewing process impacted or even halted because of support issues.”

  Bennett told Beverage Master Magazine that McCrometer meters have great attributes, including the aforementioned long lifespan and support. Perhaps one of the best advantages of both their MAG flow meters and the V-Cone DP meters is the advantage of having no maintenance or repair schedules.

  “That’s a big load off of a brewer’s calendar and his mind,” said Bennett. “Our new ProComm converter on the MAG meters is available with built-in verification that uses stored data to check a meter’s operation against its baseline. That’s true peace of mind. Our V-Cone Meters have been around and studied in applications that are a lot more rugged than what the typical brewery would put them through and have shown no shift whatsoever in their calibration coefficient.”

How Your Intellectual Property Can Make or Break a Merger

By: Ashley Earle, Attorney, Dinsmore & Shohl

Like a good recipe, a good brand name for a beer, wine, or other beverage can drive sales. That recipe, distilling process, bottle design, or logo is all a form of intellectual property that helps define who you are in the industry. It can also be a defining and important part of any transaction.

  In today’s COVID world, breweries, wineries and distilleries of all types are doing what they have to in order to survive and one day thrive. Some are turning to mergers and acquisitions as potential strategies for survival and success. It’s important to know how your intellectual property (IP) can make a difference, good and bad, to a potential deal. Below are the five things you need to know about IP in a merger or acquisition. 

What Is IP?

  Before we get there, it’s important to quickly define the different types of IP that exist:

•    Trademarks: A trademark is the most common form of IP protection in the alcoholic beverage industry. It protects anything that functions as a source identifier, (product names, company names, logos like the NBC peacock, bottle or can designs like the Coca-Cola bottle, or even sounds like the ESPN tones). Trademarks can be registered and unregistered, though unregistered marks are limited in geographic scope.

•    Patents: This protects a unique invention (a brewing process, a novel distillation column), a unique design (bottle designs), or a unique plant (strains of yeast or grapes). Patents must be registered and issued to be enforceable, though pending applications will be relevant in an M&A deal.

•    Copyrights: Copyright protection arises automatically as soon as an original work of authorship is “fixed” into something tangible. Basically, once you draw the artwork for your bottle or can, write the code for your website, or draft up a piece of marketing material, it is protected by copyright. Registration affords several key benefits but is not required to claim ownership in a work.

•    Trade secrets: A trade secret is something that gives you value because it is secret. Examples include customer or vendor lists and recipes.

  Additionally, when you go through a merger or acquisition, you will often be asked to list out all of your domain names, social media, and in some cases, any software that is material to your business. It is important to make sure you keep a list of these assets in case an opportunity arises.

  Now that we’ve covered the basics, let’s dive into the top five things you need to know in a merger and acquisition when it comes to your IP.

What IP Do I (and They) Have?

  Start by taking an inventory of everything you have that is protectable – beer names, wine names, logos, artwork, packaging, unique brewing processes or recipes, social media accounts, and domain names – to name a few. This should include anything you registered, anything you are trying to register (like pending applications), and anything unregistered but material to your business. Disclosure schedules are used to list all of the IP and what is to be transferred in the transaction (if not everything). Be clear to fully disclose what you have without overstating.

  The same should be true of the other side. You should ask them to disclose all of their IP assets that will be a part of the deal, all the way down to their social media accounts and domain names.

  As you and the other side are pulling this together, you also want to collect all of your documentation to evidence the IP. This could include trademark applications and registrations, copyright registrations, patent applications, patents, email accounts, and social media accounts. You will also want to pull any licenses you have to use IP, independent contractor agreements regarding creation of IP, liens on IP (if applicable), and any documentation relating to disputes or claims of infringement involving your IP (if applicable). Make sure you have clear documentation of the chain of title (meaning who owned it at each point) from origination to present day.

Do Both Sides Actually Own Their IP?

  The next question you need to ask yourself in any deal is: Do we actually own that IP? The answer may not be as simple as you think. You need to be sure that all assets are owned by the company and not an employee, owner, or even a third party. A lot of companies don’t realize that if they hire an independent contractor to make something, whether a website, logo, or marketing materials, unless they have the contractor expressly assign the finished product to their organization, the contractor owns it. Employee-created works should automatically transfer to the employer, but it is still good practice to include an assignment in your employment agreements. 

  Ownership issues can derail or even terminate what would otherwise be a great deal. Make sure that the ownership of IP on both sides is clearly documented and validated as you move forward.

What Are We Agreeing to In the Deal Terms?

  Within the deal documentation, there will be a number of representations and warranties and indemnity provisions that relate solely to IP and the disclosures and transfers being made in the deal. This is why it’s so important to make sure you have your ducks in a row with your IP as you move forward.

  These reps and warranties will range from confirming ownership of the IP to promising your IP does not infringe the rights of others. You can also see reps and warranties that ask you to declare that your employees have not created any IP that is not owned by the company. Your legal counsel can help to finesse the reps and warranties to match your circumstances and protect you as best they can, but it’s important you ensure everything stated is accurate. A broken rep and warranty in a transaction can be expensive and arise after the deal is done.

  You may also be asked to indemnify the other side for any claims of infringement of the IP, even if you are selling your business to them and walking away. Typically, indemnity provisions should only last for a particular time period following the sale and have a few caveats of what does and does not trigger indemnity. It’s important to make sure you understand them and how they may impact you in the future.

  It’s also important that you understand what will happen to your IP or the other side’s IP after the deal is done. Who will end up as the owner? Who has control? Will any IP be left behind with either party? Are there any pitfalls with the IP that need to be addressed (like prior enforcement matters that resulted in Coexistence Agreements or liens)? Given the importance of IP to any business, it’s doubly important to understand what happens to the IP in the deal as you look to the future.

Were Things Done Right with the IP by Both Sides?

  While you want to believe all assurances a party makes in fostering the deal, both sides must do their due diligence. Did an employee copy and paste images from Google that are infringing someone’s copyright? Did you use unauthorized background music in a promotional video or advertisement? Did you see a great idea at a trade show and implement something similar, not realizing it was patented or trademarked? As the brewery, distillery, or winery grows and expands, so do the footprint and the risk for claims against you.

  Similarly, data privacy can be another pitfall. If any customer information is kept, such as names, birthdays, addresses, or credit card information, (or more abstract information such as IP address or use of cookies, beacons, and pixels), you have to be sure that this information is kept safe and confidential. Ensure there are no data breaches and never have been any breaches.

Likewise, if you are keeping any data, a clear privacy policy must be in place. Do not be tempted to copy and paste a privacy policy found online. The Federal Trade Commission (FTC) often comes down hard on businesses for having a policy that does not match what they are actually doing. Copying and pasting can lead to a policy that misleads consumers as to how you handle their data – and that’s a big problem.

A privacy policy can be fairly simple and straight forward: Explain what information you collect, where you keep it, how long you keep it, and how it is stored, and provide an option for customers to opt out (such as an email address to contact). The more information (and the clearer the information) the better – and when in doubt, ask for affirmative consent.

  With these five things in mind, you can approach a deal with confidence and find the perfect fit to expand and secure your brewery, distillery, or winery. When in doubt, consult your attorney – we’re here to help!

  Ashley Earle is an attorney at Dinsmore & Shohl who focuses on branding protection through trademark and copyright law. Dinsmore represents breweries, distilleries, wineries, cider companies and other alcoholic beverage producers in business, regulatory, intellectual property and litigation matters. Dinsmore attorney represent these entities in every stage of their business, from formation to operation to final sale or closure.  Ashley can be contacted at…513-977-8522 or ashley.earle@dinsmore.com