Category: Cider

How Craft Beer Producers Can Incentivize Distributors and Wholesalers to Help Them Go to Market

Cyndi
lone beer glass in front of a beer stall

By: Nichole Gunn, Vice President of Marketing and Creative Services, Incentive Solutions

As a craft beer producer, competition is fierce. According to the Brewers Association, there were 7,346 craft beer producers in the U.S. last year competing for $27.6 billion in sales. That’s a lot of beer! And, that doesn’t even take into account competition from “The Big Five” or import beer for shares of the overall U.S. beer market.

  For craft beer producers who are looking to scale and increase sales, it might be tempting to start pouring your marketing funds into consumer marketing. But will that really make a splash? Think of the hundreds of millions in media spend by beer companies every year that you’ll be going up against.

  Could there possibly be a more efficient way to use that marketing spend? For craft beers producers who are trying to go to market, it’s important to sit down and ask yourself, “Who has the biggest impact on whether or not end consumers find my beer? And how can I motivate them to prioritize my business?”

Understanding the Craft Beer Sales Channel 

  When it comes to connecting with end consumers, craft beer producers have four options:

•    On-Site: Selling directly to consumers at your brewery.

•    E-Commerce: Selling directly to consumers online.

•    Retail: Selling to consumers through other retailers.

•    On-Premise: Selling to consumers through bars and restaurants.

  However, on-site sales are limited by geography and e-commerce sales require brand familiarity or extremely creative (or very expensive) marketing. For a scalable sales and marketing strategy, craft beer producers have to turn their attention to retail and on-premise sales and the indirect sales force that helps them achieve penetration with these vendors.

Incentivizing Distributor and Wholesaler Sales Reps

  Outside of smaller, highly localized breweries, most craft beer producers rely on distributors, wholesalers and other supply chain trading partners to market to retailers and restaurants. Distributor and wholesaler sales reps are responsible for selling vendors on the value of your beer, negotiating pricing and terms of sale agreements and ultimately getting your craft beer to market.

  There’s one small problem: no matter how awesome your craft beer is, it only a small fraction of your distributor or wholesaler’s supply mix. In this battle for mindshare, it’s up to you to educate reps about your brand, enable them to sell your product and supply them with a value proposition that inspires them to take action on your account.

  This is where an incentive program comes into play. When many people think of incentive programs, they think about rewards. But while rewards play a big role in building relationships with your channel partners and adding to your overall value proposition, modern incentive programs take a more holistic, software-driven approach.

  Today’s incentive programs act as comprehensive sales and marketing platforms that enable craft beer producers to:

•   Build mindshare with distributor and wholesaler sales reps.

•   Target promotions by qualifying participant type, regions or product line.

•   Fill data gaps within their channel.

•   Enable sales reps to sell their product to vendors.

•   Deepen relationships with partners throughout their channel.

Building Mindshare with Distributors and Wholesaler Sales Reps

  Sales reps, for the most part, sell what they know. However, in a crowded supply mix, building this awareness and product knowledge with sales reps can be challenging. While every supplier wants something from these outside sales reps, far fewer supplier focus on offering value and creating memorable brand interactions.

  Inviting these sale reps to enroll in an incentive program where they have the opportunity to earn millions of rewards or exclusive incentive travel opportunities (and perhaps giving them a generous point bonus upfront) is more than a nice gesture. It’s a strategic differentiator and an opportunity to stand out from your competitors.  

  Your rewards program also creates new opportunities for communication and engagement that aren’t strictly business. These brand interactions are an opportunity to improve personalization and build relationship capital, which can be difficult to achieve in supply chain partnerships.

Targeting Promotions to Minimize Cost and Maximize Return

  It’s worth noting that a channel partner program is an investment. When planning an incentive marketing strategy, craft beer producers need to focus on maximizing the return on their marketing spend. This means that they should target first and scale second.

  For instance, would it make more sense financially to target your program to the sales and brand managers at the distributor level or the individual reps who work beneath them? It depends on your go-to-market strategy and the size and number of distributors you work with. If you sell through smaller wholesalers with a handful of reps, who each are responsible for a significant portion of your overall sales volume, then it might make sense to structure your program to reward individual sales reps. On the other hand, if you’re selling through a number of wholesalers and distributors, or an extremely large distributor with thousands of reps, it might make more sense to target your incentive programs to sales and brand managers.

  Additionally, from those managers and sales reps, craft beer producers can set qualification thresholds, based on sales volume or engagement, to ensure that their incentive program spend is allocated toward the participants who are most impactful to their sales growth.

  Another aspect of your targeting strategy is choosing to set incentive promotions by specific regions or product lines, based on strategic initiatives and opportunities for growth.   

Collecting More Complete Data Throughout Your Channel

  Craft beer producers, like many other companies who sell into a channel, often struggle with having inaccurate and incomplete data about their channel. Your incentive program is an opportunity to motivate distributors and wholesalers to provide more complete data. There are several ways craft beer producers can use their incentive program to fill in gaps in channel data:

•   Structuring enrollment forms that capture contact information and firmographic data during program registration.

•   Including automated tools for sales reps to attach invoices or other documents as part of the program’s sales verification process.

•   Offering rewards to participating sales reps for referring other reps within their organization.

•   Rewarding sales reps for completing voluntary surveys that can be used to clean up your existing database or collect more information about your participants’ interests, demographic and lifestyle.

•   Analyzing engagement datapoints the program generates to spot highly engaged accounts that are ripe for upsells and cross-sells.

  All of this information can be used to inform your sales and marketing strategy and increase the level of personalization you offer your supply chain partners.

  However, all the data in the world is useless unless you’re able to act on it. Modern incentive software includes CRM integration, data filters, reporting dashboards and custom reports to streamline this data for optimal use.

Enabling Your Distributor and Wholesaler Sales Reps

  Do you know one of the quickest ways to build brand preference with an indirect sales rep? Provide quality sales enablement. Using proven strategies to educate sales reps on your brand and your products makes it easy for them to sell your products to vendors.

  Integrating interactive quizzes and training videos with your incentive program is a powerful tool for supplying your external sales reps with the knowledge they need to sell your beer. This education can be supplemented by your incentive program’s digital communication platforms. (If you use this kind of strategy, make sure to break things up into bite-sized pieces and focus on the highlights your partners will need to help you go-to-market). Additionally, these quizzes are another opportunity for sales reps to earn rewards, increasing the overall value proposition of your program.

Deepening Relationships Throughout Your Channel

  Finally, in addition to short-term sales growth and marketing penetration, your incentive program has another benefit that will have a lasting impact on the success of your go-to-market strategy: relationship-building. Non-cash rewards are a social currency that achieve emotional impact and memorability with sales reps at distributors and wholesalers. In addition to motivating sales growth and reinforcing desired behavior, the rewards your program offers create a sense of personalization.

  For craft beer producers, your distributors and wholesalers are more than just conduits to the end consumer. They are your partners – an indispensable part of your go-to-market strategy. Offering your sales reps the opportunity to choose from exciting rewards or treating top performers to unforgettable incentive travel experiences represents the type of brand interactions that will set you apart from the competition. But more than that, these rewards inspire your distributor and wholesaler sales reps to emotionally invest in your brand and take an active interest in your success.

Unsure About Where to Start? Be Smart, Explore Your Options and Focus on Scalability

  An incentive program can be an integral part of a craft beer producer’s go-to-market strategy. However, what about companies who have never used this type of strategy before? If you are interested in creating a channel marketing program for your distributors and wholesalers, do your homework. Identify a goal for your program and the software functionalities you’ll need to achieve that goal.

  Compile a list of incentive program providers who fit your requirements and who have a proven track record, with case studies and testimonials to prove it. From there, begin reaching out to these providers and enlist their help in planning your incentive strategy. Use these conversations to refine your strategy and learn more about what has worked for companies with similar goals and similar distribution channels to yours in the past.

  Once you’ve decided on a provider, you don’t have to go all in. It’s prudent to start small, maybe with a pilot program or highly targeted incentive promotion. You can always scale, once you’ve proven that you can do this successfully.

  However, it’s also important to have a sense of urgency. As craft beer sales continues to grow, so will competition for craft beer dollars. Beating your competitors to building an incentive program for your distributor and wholesale sales reps can be a major competitive advantage. Plus, you owe it to your future customers to help them find their new favorite beer!

  Nichole Gunn is the VP of Marketing and Creative Services at Incentive Solutions (www.incentivesolutions.com), an Atlanta-based incentive company that specializes in helping B2B companies improve their channel sales, build customer loyalty, and motivate their employees. Nichole Gunn can be reached at ngunn@incentivesolutions.com

Distribution Agreements: Negotiate Your “PreNup” Carefully

Cyndi
Business people shaking hands, finishing up a papers signing
Business people shaking hands, finishing up a papers signing. Meeting, contract and lawyer consulting concept.

By: Brian D. Kaider, Esq.

Starting a brewery requires learning a lot of new skills and practices that have nothing to do with making great beer.  One of the most confusing and frustrating is the issue of distribution.  If their state allows, most new breweries initially distribute their own products and, if the brewery is content to be relatively local, that might never change. 

But, in many cases, brewery growth necessitates working with a distributor.  This is not a relationship to be entered into lightly. A distributor becomes an ambassador for the brewery’s brand and, once retained, the supplier may have little control over how its beer is marketed. Further, these relationships can be difficult or financially impossible to break once established.

  Supplier/distributor relationships are governed by franchise laws in most states. In the absence of franchise laws, the relationship is defined entirely by a distribution agreement between the parties. But, even in franchise states, the distribution agreement can play a critical role, particularly in the termination of the distributor relationship.

  Too often, however, breweries accept a distributor’s “standard” agreement and when the relationship sours, the supplier finds that they are stuck with no viable option to terminate. The best practice is to engage an experienced attorney to negotiate the terms of the distribution agreement. While even the best attorney cannot evade state franchise laws (which generally prohibit a distributor from waiving its rights), there are ways an attorney may help bring balance to the supplier/distributor relationship.  Some of the key terms to negotiate include termination, territory, brand scope, and exclusivity.

Termination

  The most critical section of the agreement sets forth the manner and circumstances under which a supplier may terminate the distributor. In a franchise state, the law typically says that a supplier may terminate for “good cause.” If good cause is defined in the law, it is paramount that the distribution agreement mirror the language of the law, because in many cases, a contract that contradicts the law will be held invalid, leaving the supplier in the position of effectively not having an agreement at all.

  For example, the Virginia Beer Franchise Act states that good cause includes “failure by the wholesaler to substantially comply, without reasonable cause or justification, with any reasonable and material requirement imposed upon him in writing by the brewery.”  Further, the Act provides, “good cause shall not be construed to exist without a finding of a material deficiency for which the wholesaler is responsible.”  Tracking that language, a distribution agreement in Virginia should clearly define certain of the distributor’s obligations as “material requirements” and explicitly define certain actions as “material deficiencies.” 

For example, the Virginia law identifies failure to “maintain a sales volume” of a brewery’s brands as being a reasonable and material requirement.  But, the law does not specify what volume is required.  So, the distribution agreement should clearly lay out specific minimum sales volumes (preferably on an escalating scale) and identify the requirement to hit those volumes as a material requirement of the contract. 

  When the law does not define good cause, and in non-franchise states, it is essential for the distribution agreement to do so. The contract should clearly set forth the distributor’s requirements that are critical to the business relationship and for which failure to perform will be grounds for termination.

Examples of common requirements include: meeting specified sales and marketing goals, maintaining appropriate records and reports regarding inventory and sales, transporting and storing the product under specified temperature and lighting conditions, exercising adequate quality control measures to ensure product freshness, and paying invoices within a specified time frame. It is also common to include termination rights if the distributor is declared bankrupt, enters a voluntary’ petition for bankruptcy, enters into a compromise or agreement for the benefit of its creditors, or fails to maintain in good standing all Federal and State licenses and permits necessary for the proper conduct of its business.

  In some cases, sale of the distributor or even a change in the ownership structure may be justification for termination.  In February 2019, Bell’s Brewery of Kalamazoo, Michigan completely pulled all of its distribution in the Commonwealth of Virginia.  The issue was that its distributor in Richmond was sold to a subsidiary of Reyes Beer Division, the largest distributor of beer in the United States.  Per its distribution agreement, the original distributor was to have provided Bell’s with certain information about the sale to Reyes, but it failed to do so and Bell’s believed that because it did not have the opportunity to properly vet the new distributor, termination of the franchise was warranted.  To this day the dispute has not been resolved and Bell’s beer is not available in Virginia.

  In most states, a supplier must compensate the distributor for the lost business even if the supplier is able to terminate for cause.  Sometimes the law simply says the supplier must pay the distributor the “fair market value” of the distribution rights.  There can be an expensive battle just to determine that compensation if fair market value is not defined in the distribution agreement.  Often the value is defined as a percentage of the prior year’s case volume multiplied by some dollar amount per case. The “standard” contracts pushed by some distributors can be very severe in this section. In the beer industry, it is not uncommon to see values set at an entire year’s worth of profits times a multiplier that can range from 1.5 to many times higher. In practice, often a new distributor will buy out the distribution rights from the old distributor, but if the supplier wants to return to self-distribution, this buy-out provision may be cost prohibitive. 

  While the beer franchise laws in most states were written at a time in which large beer manufacturers had significant market power over small distributors, those roles have substantially reversed.  Slowly, state laws are being revised to accommodate this change.  In Maryland, for example, the law changed on January 1, 2020 to eliminate the “for cause” provision of termination for suppliers who manufacture fewer than 20,000 barrels per year and the termination notice was shortened from 180 days to 45.  However, the manufacturer still has to give the terminated distributor fair market value of the franchise.

Territory

  Depending on the size, experience, and reach of the distributor, there may be an opportunity to creatively carve out different territories. Territories are most commonly limited to certain states. However, a supplier may be able to limit a smaller distributor to certain counties or even specific types of establishments (grocery stores, but not restaurants, for example). One of the clearest breaches of the distribution agreement, that may constitute good cause for termination, is for a distributor to make sales outside of its contracted territory. 

Brands

  Generally, when a distributor is hired to carry a brewery’s brand, it has the right to all of the products in that brand. But exactly what constitutes a  ‘brand” is unclear both in the statutory language of most state franchise laws and in many distribution agreements. 

In Maryland’s beer franchise law, for example, “brand” is not explicitly defined, but the law appears to favor the distributor in terms of brand scope. Specifically, section 105 of Maryland ‘s Beer Franchise Fair Dealing Act prohibits a brewery from entering into a beer franchise agreement with more than one distributor for “its brand or brands of beer” in a given territory. One might argue that the language “or brands” means that the first distributor has the right to all brands of the manufacturer in a given territory.

In fact, that very’ issue was litigated in the 1985 case of Erwin and Shafer, Inc. v. Pabst Brewing Co., Inc. and Judge Couch, writing for the panel of The Court of Appeal of Maryland, disagreed. The court held that if a brewery retained a distributor to handle one or more of its brands within a territory, it could not then contract with a second distributor within the territory for those same brands. It could, however, contract with a second distributor to carry a different set of brands.

  How far the court would take its interpretation of what is a “brand” is unclear, however. In the Pabst case, the first distributor was given the right to distribute Pabst brand beers, but Pabst later merged with Olympia Brewing Company and gave the second distributor the right to sell its newly acquired Hamm’s brand beers. Whether the court would have allowed the brewery to contract with one distributor for Pabst and another for Pabst Extra Light it did not say.

Exclusivity

  Even if rights under a distribution agreement cannot be divided by brand (as in the case of the beer franchise law in Maryland), some states may nevertheless allow a supplier to contract with more than one distributor within a territory. If permitted in their state, a brewery should ideally enter into all of its distribution agreements for a given territory simultaneously, providing notice to each distributor. At a minimum, the brewery should ensure that the first agreement entered into is explicitly designated as non-exclusive. Otherwise, the distributor may view the agreement as giving it exclusive rights to the territory and could sue the brewery for diminishing the distributor’s business if it were to engage a second distributor in that territory.

Final Thoughts

  Whether a brewery is in a franchise state or not, it is critical that it review and negotiate its distribution agreements carefully, with the assistance of an experienced attorney. It is also important to remember that the supplier’s diligence does not end when the agreement is signed. No matter how well the terms of the distribution agreement are negotiated and drafted, they are effectively useless if the supplier cannot back up its claims for good cause.

Accordingly, thorough documentation is essential. If a distributor is not meeting sales goals, mishandling product, or failing to provide adequate reports, they must be given written notice of those deficiencies each time they occur.

  There are great distributors out there who become essential partners in a brewery’s business. But, sometimes those relationships can sour and signing an agreement without anticipating complications down the line can make it virtually impossible to sever those ties. A little forethought and planning and a lot of diligence will go a long way toward a successful termination of a bad relationship.

  Brian Kaider is a principal of KaiderLaw, an intellectual property 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.

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

Cyndi
beer carriage

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

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

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

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

  British soldiers wrote in their diaries about beer:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

“Feb. 23/19

Dear Clara:

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

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

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

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

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

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

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

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

“Hello Rummy:

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

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

  From the Archives of the National WWI Museum and Memorial.

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

Cyndi
map seen in an iphone

By: Becky Garrison

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

ShiftNote

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

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

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

Whiskey Systems Online

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

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

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

Daruma Tech

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

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

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

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

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

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

KegID

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

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

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

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

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

Kegshoe

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

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

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

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

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

Small-Batch Maps

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

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

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

CIDER: It’s Time is Now

Cyndi

By: Tracey L. Kelley

3 cocktails in glass
Photo credit: Kim Fetrow Photography

North American regional and local cider makers are throwing elbows at major corporate producers, trying to respond to consumers’—particularly those in the 18–24 demographic—demands for alternatives to mainstream products. This is good news for producers eager to tap into the young but evolving cider sector. Current market analyses indicate cider sales will dip slightly through 2022, but some experts report this is only because larger, national brands are losing footing as the craft ciders surge forward.

  Nevertheless, there are growing pains within this emerging product line, especially when there’s so much education necessary to help the public understand that cider:

1)  Isn’t beer or wine.

2)  Is just as complex as those beverages, with particular nuances and unique profiles.

  It’s an interesting challenge for a beverage that relies on a fruit with approximately 2,500 varieties in the United States alone. Apples are grown in all 50 states in America, and five of the 10 provinces in Canada. This means regional and local orchardists offer unlimited possibilities for crafters.

To share the knowledge that’s plentiful for wine, beer and spirits, but less so for cider, we reached out to the following experts:

Peter Glockner, co-owner, director, and brewing/filtration sales, Cellar-Tek. The company started in 2004 as a two-person operation in British Columbia, specializing in winery supplies. Now based in both British Columbia and Ontario, it also provides equipment and supplies for craft brewing, cideries and distilleries.

Bill and Michelle Larkin, co-owners, Arsenal Cider House, established in 2010 and headquartered in Pittsburg, Pennsylvania, with additional tap houses in Wexford and Finleyville, plus taps in rotation throughout Philadelphia. Another location in Cleveland, Ohio, is scheduled to open by the end of 2019. The Larkins produce hard apple cider, cider-style fruit, grape wines and mead. Flagship pours include Fighting Elleck Hard Apple Cider, Archibald’s Ado Hard Apple Cider, Picket Bone Dry Hard Apple Cider and Murray’s Mead, with various seasonal and one-off releases on tap at each location. Annual production is more than 50,000 gallons.

Molly Leadbetter, owner, Meriwether Cider Company, with two locations in Idaho: a taproom in Garden City and a cider house in Boise—the first in the state. Opening in 2016, Meriwether is owned and operated by the Leadbetter family: Molly, sister Kate, and parents Ann and Gig. Notable award-winning ciders include Foothills Semi-Dry, Strong Arm Semi-Sweet, Blackberry Boom, Ginger Root and Hop Shot, crafted with Citra hops. Annual production is approximately 30,000 gallons.

Michelle McGrath, executive director, United States Association of Cider Makers, based in Portland, Oregon. Its mission is to “grow a diverse and successful U.S. cider industry by providing valuable information, resources and services to our members and by advocating on their behalf.” The USACM also stages the popular CiderCon each year, which provides new and existing members opportunities for workshops, cider tours and networking.

Tie Information to Innovation

  The Larkins started Arsenal with $60,000 and zero working capital in the basement of their city row-house. Bill was an accountant, and Michelle, a pre-school teacher. His winemaking hobby expanded into a passion for cider and mead. “When we started in 2010, there wasn’t anyone doing what we wanted to do anywhere around us. We had to essentially make up things as we went and hope for the best,” Larkin said. “This is why I always tell new people in the Pittsburgh industry to feel free to reach out to me if they have a question.”

  The Leadbetter family, after years in other professions, chose to band together and open a cider house. “My sister, my dad and I all took cider-making classes at Washington State University’s extension program, and Mom took a business of cider class. And webinar-based classes on our specific areas inside the business,” Leadbetter told Beverage Master Magazine. “We also attended the USACM’s CiderCon the years before and after we opened, which was incredibly helpful, and I recommend to everyone!” They launched Meriwether with a Kickstarter campaign.

  McGrath said the USACM strives to provide as much insight as possible. “Our Certified Cider Professional program educates distributors and retailers about cider, but cider makers may gain tools for conversations with those audiences as well,” she said. “We also have marketing resources our members can use to educate their accounts about cider. Lastly, our recently-refreshed cider lexicon project aims to curate a language for talking to customers about cider. Having the same talking points is good for any campaign—including spreading the cider gospel.”

  Refining cider lexicon is one way to lessen the gap between what consumers currently understand about cider and how makers want to communicate flavor profiles and other characteristics. For example, the USACM suggests “focusing on the accepted scientific classifications of apples: sweet, sharp, bittersweet and bittersharp.” There are also grouping categories so consumers can more easily select what taste appeals to them and have confidence in that choice. So the USACM considers input from producers to create classifications that might include something like:

•   Does it taste dry or sweet?

•   Is it tart? Spicy? Sour? Floral?

•   Is it fruit-forward or tannic?

•   Is it light-, medium- or full-bodied?

  This type of universal messaging helps all cider producers continue to create beverages people want. “Don’t make products for yourself unless you’re planning to buy them all, or you are a social media star influencer,” Glockner said. “Know your market and cater production to the customer base(s) you’ve researched and proven will trade their hard-earned money for your product.”

  Progressive success depends on customer relationships—it’s not a cliché when it’s true. “We have a gold standard of treatment for all of our customers whether they’re tasting room visitors or on-premises licensees,” Larkin said. “Everyone in our company in retail, sales and distribution know the customer is always right and that we’ll bend over backward to make them happy. I can’t overstate the importance of this.”

  “We have four core values: family, integrity, generosity and fun. We don’t make any company decisions unless they fit into this framework,” Leadbetter said. “We run a business we can be proud of, that strives to make our community better, our guests happy, and makes our and our employees’ professional and personal lives fulfilling. Working with nonprofits, connecting with the community, and educating people on cider are huge parts of doing all those things.”

  Arsenal Cider House partners with a local activity and tour provider that plans community excursions. Meriwether Cider Company’s approach includes integrative actions such as Purposeful Pours, a quarterly event that raises money for different nonprofits in its community, and Cider Crews, a tiered club program to encourage a dedicated clientele.

Mind Your Business

  The foundational practicalities of your start-up are often a mashup of reality and possibility. So start with the right advice.

  “We always advise an in-person consultation with one of our cider equipment sales gurus to ensure that our potential customers are correctly assessing their equipment choices using the correct data and math,” Glockner said. “We also try to get them to think ahead, so they don’t face having to upgrade their equipment two-or-three years after opening because they didn’t plan for growth. He stressed the need for reinforced vision. “Production plans and projections need to be backed up with solid sales plans and projections. Otherwise, you’ll have an expensive hobby, not a business.”

  He also pointed out there’s no “right” way for cideries to choose equipment. “’Right’ could mean the equipment fits their budget, or it could mean it matches the processing rates they need to achieve for the total volume fruit they harvest. Assuming that matching equipment sizes to the customer’s projected harvest numbers and product plans is the ‘right’ equipment, doing so can minimize the required time to process a given volume of fruit—typically expressed in kilograms per hour of fruit processed,” Glockner said.

  “If one producer is doing multiple small-batch productions of different styles or varietals, their equipment and tank size choices will be smaller than another producer looking to make large volumes of one or two,” he said. “The latter would benefit from equipment with higher throughputs and larger tanks to process bigger batches for longer continuous periods of time. So getting the ‘right’ equipment is all about creating operational efficiencies for the type of production the customer wants to do.”

Here are some additional tips from Cellar-Tek’s Co-owner:

1)  Most equipment for the cider industry isn’t produced in North America, so expect a supplier of specialized processing equipment containing electrical components to have the equipment UL- or CSA-inspected and approved when it lands in North America.

2)  Also, expect to have the supplier set up an appointment at your production facility to start the equipment and provide basic operations training along with any applicable maintenance and safety advice. This tutorial might not be necessary for “basic on/off equipment,” such as manually-fed fruit mills, pumps, or manual gravity fillers.

3)  If you can find used equipment in relatively good condition and see it working before purchase, it may save you capital during the start-up phase of development. However, lack of warranties and local factory support from a supplier makes it a difficult decision when your equipment breaks down in the middle of harvest, and there’s no technical support in the area to repair it quickly. The cost of lost production, spare parts and labor to repair a broken machine can easily surpass the price of a similar piece of new equipment.

4)  If you don’t have experience with fermentation, hire a pro to do it for you, or at least a reputable consultant with a list of references who can teach you the many ins and outs of a successful fermentation. “The pitfalls of fermentation are many,” Glockner said.

  Our experts all recommended allowing an ample amount of time and patience to make it through multiple layers of bureaucracy to establish your cidery. “Cider regulations are incredibly complicated,” McGrath said. “Anybody thinking to jump into the market should take some time to understand how they differ from wine, beer and spirits.” The USACM intends to provide more checklists to help answer producers’ questions, but consult your regional association for more specifics.

  Larkin added, “Many people think the biggest hurdle is getting the liquor license, but it goes way beyond that. There are zoning and building codes, county and state health requirements, general business licensing, taxes etc….To be in any business, you have to be determined and not let anything get in your way. You need to be a jack of all trades. There’s a solution to almost any problem—you just have to keep on it. You’ll get through it.”

  Leadbetter also pointed to the need for fluidity in your business approach. “We still have our original lineup of year-round flagships, but we added many seasonals, one-offs, barrel-aged and small batches to the mix every year—much more than I thought we would,” she said. “And we never envisioned having a second Meriwether retail location when we started. Truthfully, at the time, we were barely two years old and not ready to expand. But we felt an urgency because downtown Boise was in the midst of a renaissance with new businesses and bars, and we lucked into the perfect space. We might have balked and given up if not for that.”

  Larkin said, “If an opportunity seems like a good one and we can afford it, we do it.” This approach applies to both Arsenal’s stair-stepped location expansion and shifting model.

  “When we first opened, we planned to sell half our inventory by refillable growler and the other half by bottle conditioning in Champagne bottles. We sold through the initial inventory so fast, we never had the opportunity to do any type of packaging, and we’ve just been trying to keep up all these years,” he said. “We finally started canning one product and bottling a mead product for the first time after eight years in 2019. We now have the capacity to expand our product offerings and plan to do so in 2020.  It only took 10 years to get to it!” 

  McGrath told Beverage Master Magazine that “there are certain pockets of the cider market managing to make apple-forward ciders cool. That’s always been a challenge, especially in today’s craft beer culture. It’s controversial, but I think putting these types of ciders in cans is part of what’s helping drive that. It makes a complex, nuanced beverage more approachable.”

  She added that it’s important to “figure out how to incorporate educating consumers about apples into your marketing and branding. Apples are what this industry is all about. We can celebrate a diverse range of products and styles, but when consumers catch on to the variation an apple variety (and season) can provide, it will be good for cider makers and orchardists alike.”

Expanding the Industry

  All of our experts are excited to contribute to the reawakening of this pioneer beverage. Here are some final thoughts they believe about cider’s potential.

  Cellar-Tek’s Glockner: “By far the most exciting trend is the growing global acceptance of locally-made craft beverages—be it cider, wine, beer or spirits—by the sectors of the general public that used to gravitate to the large, corporate-produced beverages.”

  Larkin of Arsenal Cider House: “High-quality products aren’t optional. It’s not just important for your business, but the business segment as a whole, especially in one as young as mead and cider. This philosophy extends to how we source our ingredients, as well. If care isn’t taken with raw materials, we can tell.”

  Leadbetter of Meriwether Cider Company: “After creating a good product, our main mission is to create what Danny Meyers (restauranteur and CEO of Union Square Hospitality Group in New York City) calls ‘enlightened hospitality’: ‘treat your employees well, and they will take care of your customers.’”

  McGrath of the United States Association of Cider Makers: “Most people who love cider also love food, and the consumer knowledge that cider pairs really well with food is increasing. Regional cuisine cider-pairings, geographical cider cultures, a focus on locally-celebrated apples (like Gravenstein for Sonoma County in California)—these things all make it a really fun time to create cider right now.”

Assessing the Growth of Cider Apples in the Pacific Northwest

Cyndi

By: Becky Garrison

4 cider cans in a table

In 2016, the Northwest Cider Association received a specialty crop grant from the Oregon Department of Agriculture. This grant enabled them to launch a signifi-cant initiative encouraging farmers to plant cider apple trees in the Pacific North-west. The Northwest Cider Association chose to focus these planting efforts in Oregon in two areas: Willamette Valley and Hood River.

  While there has always been a small selection of heirloom cider apples available for small-batch releases, this initiative marks the first time post-prohibition that a sizable number of cider apples will be available to cider makers. Will these ap-ples bear fruit in the burgeoning cider market?

  Currently, there is no available national data on the breakdown of cider made with cider apples versus dessert apples. Michelle McGrath, Executive Director of the United States Association of Cider Makers, attributes this lack of statistics to the fact that the U.S. cider market consists primarily of many very small cideries. As such, their sales are not reflected in any of the scan-based data found in trade reports.

  Even though a majority of ciders available in grocery stores, bars and restaurants are made with dessert apples, a large percentage of the cideries in the U.S. uti-lize cider apples. In McGrath’s estimation, “Fifty percent of our paying members grow their own apples, and 50% of our paying members are using cider apples to make cider.”

  Furthermore, regional brands continue to absorb more of the cider market share, and these brands offer a greater variety of ciders to consumers. McGrath says that in 2012, regional brands represented about 8% of the cider retail market, a number that has risen to 34% today. Also, regional brands of cider sales have grown 16% in the last year, while national brands declined 9%. Because national brands represent more of the total market share, the net result is an overall de-cline of 2% in domestic retail cider sales in 2018. 

  At first glance, this appreciation for small regional craft ciders seems to indicate consumers will be interested in paying a premium for heirloom ciders made with cider apples. Crystie Kisler, co-founder of Finnriver Farm & Cidery, observes how the consumer’s palate has evolved since 2008 when she founded an 80-acre farm situated in Chimacum Valley, Washington.

  “We have appreciated seeing how the sensibilities and palate of folks in the cider-drinking community have evolved over the years,” Kisler says. “We get a lot of interest in our homegrown ‘estate’ ciders—featuring those traditional cider apple varieties with greater complexity—and enjoy seeing people discover the nuances and possibilities in cider fruit.”

  Kisler’s partner at Finnriver, Eric Jorgensen, says that the higher price point of cider made from cider apples does not appear to deter customers who travel to their tasting room. “I’d say that despite their higher price point, when we have them available, they are just as popular as our ciders made from dessert fruit. That preference runs the full range of consumers—we get a very broad spectrum of people coming to visit us.”

  According to Jorgensen, this consumer interest in cider apples can be attributed to several factors: flavor profiles that are nuanced, interesting and complex; gen-eral values around tradition and the rediscovery of these apple varieties; and in-terest in products made with ingredients farmed locally and on a smaller scale.

  From the cidermaker’s perspective, Andrew Byers, Head Cidermaker & Produc-tion Manager at Finnriver, says the advantage of producing cider apples is based in complexity. “Making cider from dessert fruit—be it antique varietals or more modern releases—is making cider from fruit that was conceptualized for a differ-ent purpose, such as eating a fresh apple, or saucing, or baking a pie. Cider fruit has been selected for the qualities they bring to the cider. Body, phenolics, aro-matics—all that cannot be found in a dessert-fruit-based ferment.”

  Byers describes how these apples can transport drinkers to another level. “[Cider apples] waltz you across the room with ease to a place of wonderment where you didn’t know ‘apples could do that.’ [They bring you to] that lovely platform of hav-ing your horizons broadened—a place to realize you just discovered a previously unknown potential. Cider fruit, each year, is an opportunity to waltz with the pub-lic and show them the best we can be.”

  Some logistical challenges are inherent in growing cider apples not necessarily found when producing dessert apples. Tim Larsen, owner and cidermaker at Snowdrift Cider Company in East Wenatchee, Washington, says, “These apples were never cultivated because they grew in an orchard so well, or because they yielded so many tons to an acre. They are grown because of their flavor and aroma. Furthermore, fermentation and aging of cider apples is a fair bit different than working with modern eating apples.” Larsen designed his new operation, Sunred Cider, to manage these challenges for cidermakers and streamline the process between growers and producers.

  Adding to the cost of producing cider fruit is the U.S. law prohibiting farmers from harvesting apples that fall to the ground. Hence, farmers cannot mechanically harvest these apples on a large scale, unlike in the U.K., where apples can be harvested after they’ve fallen off the trees.

  Larsen points to the need for consumer education. In his estimation, “most peo-ple see cider as a sort of holistic Mike’s Hard Lemonade.” He attributes this per-ception to the fact that most large scale cider operations are forced to rely on a very restricted supply of apple juice that, at its best, is pretty uninteresting. They spice up their product, adding flavorings, sweeteners and colors. “This is great if you want something that tastes like alcoholic watermelon juice with hibiscus or some other flavor combination, but it’s not great if you want to experience real cider,” he said.

  Ryal Schallenberger of Northwest Mobile Juicing says that cidermakers try to distance themselves from the apples when they are using bulk juice. “They make comments on their labels that are generic like ‘fresh northwest juice.’ Folks that are using traditional cider apples say so on their labels, for the most part.” This distinction may be apparent to cider connoisseurs; however, this differentiation does not seem to be conveyed to the general public.

  The question, though, is how many consumers crave “real cider” given the popu-larity of ciders made with added pineapple, hops, botanicals or spices? In 2018, apple cider without added fruits, spices or botanicals constituted 63% of national retail sales. Even though over half of all sales in 2018 were ciders made with ap-ples, the trend toward producing non-apple ciders appears to be on the rise. For example, Jeff Parrish, co-owner of Portland Cider Company, notes that consumer demand continues to increase for ciders made with pineapples, pears, and other non-apple fruit.

  In his analysis, Parrish does not view large-scale production of cider apples tak-ing off unless enough cider apples are grown and harvested to bring the cost down to the same price point as craft beer. Simply put, not enough consumers are willing to pay $10 to $12 for a bottle of cider made with premium Pacific Northwest cider apples to justify producing it on a large scale.

  Also, Jorgensen says the general cider distribution market trends towards cans, and thus towards higher production volumes. He’s not aware of anyone with ac-cess to enough “traditional” cider juice to be able to package and sell in large quantities, let alone at a price point comparable to the more contemporary ciders on the market.

  Emily Ritchie, Executive Director at Northwest Cider Association, acknowledges the difficulties faced by craft cideries like the Portland-based Cider Riot. They closed their doors in November 2019 as they found themselves unable to produce their award-winning heirloom ciders while also maintaining a viable cidery and pub. “Right now, it’s harder to keep a business open when you’re just using cider fruit, as your price points are higher,” Ritchie says.

  In assessing the future of cider apples, Parrish points to cider’s long history as a working man’s drink. “It’s never been seen as having a high intrinsic value, and will not be viewed by the mass market as having a high value similar to wine.” In his estimation, history has proven that cider apples will remain a niche market with a loyal following.

  Conversely, Ritchie compares the potential growth of Pacific Northwest cider ap-ples to the growth of the wine industry in Oregon over the last 30 years. Those who planted the first vineyards in Willamette Valley and other AVA’s began from a place where they had no name recognition into producing internationally re-nowned Pinot Noirs and other varietals.

  With the first harvest from these aforementioned cider trees slated for 2020, will cider apples join Pinot Noir grapes as a fruit that defines this region? Time and price point will tell.

Finishing and Aging Options Evolve with Booming Secondary Barrel Market

Cyndi

By: Gerald Dlubala

barrels outside a facility

Those barrels hanging out in the distilleries, whether new, used or refurbished, are just getting started. Oak barrels have a full and varied life, complete with occasional travel between distilleries, breweries, wineries and back again, sometimes internationally.

  Just within the Kentucky commonwealth, there is an inventory of over eight million barrels of Bourbon and other spirits in various stages of the aging process. It’s the highest inventory in 40 years and represents almost a two-barrel per person ratio. That’s a lot of barrels coming onto the market, which coincides with a booming secondary barrel market.

Impacting Flavors By Following The Seasons

  One company helping those previously used barrels live their best life is Moe’s Barrels, with locations in Galt, Lodi and Fairfield, California. COO Dean “Deano” Wilson is a winemaker and self-proclaimed foodie, so he found it natural to follow his passion by selling previously used wine and whiskey barrels for secondary, flavor impacting purposes.

  “We source our barrels from both the big and small producers,” said Wilson. “The boutique producers are our preferred source for quality used barrels simply because they tend to take care of them a little better. We buy our barrels in lots, with 99% of them coming in already cleaned and sanitized. But we’ll look at, inspect and grade them, giving them a wine or beer grade. If they don’t qualify for that, we can use them as furniture or décor grade. A trend that has grown recently is to sell the parts of used barrels to the artistic community, selling the individual staves, barrelheads or barrel rings for creative endeavors.”

  Wilson told Beverage Master Magazine that his formula for success is to try and follow the season for selling a certain type of barrels. 

  “We get a lot of first and second use barrels at harvest time, which is very good for cross-utilization. White wine barrels are excellent for reuse with wine, Belgian style beers, Cognacs and more. The barrels we get immediately following the crush are great matches for repeated wine and bourbon use.”

  Wilson gets his used barrels delivered with blue painter’s tape over the bunghole. The tape covers the hole for sanitary reasons but still allows the barrel to breathe. If they sit around too long with the bung in, there’s a chance for mold growth. If the barrels are left with the openings uncovered, they could dry out and start to split. Moe’s does the rest, performing sanitation, rehydration, steam cleaning and hot water rinsing.

  “Communication is key for customers looking to purchase used barrels,” said Wilson. “The buyer needs to be comfortable in the relationship with the supplier. First and foremost, look for quality, but be comfortable enough to ask for what you need. Know what flavor profiles you’re looking to build. Use your nose and trust your smell when inspecting the barrels that you are buying. Some staining and minimal hairline cracks are fine, but larger, deeper cracks around the bunghole can be a sign of a problem, and it’s always best to stay away from any hardened purple stains. Check for holes or damage that could be related to borer beetles. We invite all buyers into our warehouse, where you can completely inspect the barrels you’re looking to purchase. Inspect them from head to head, inside and outside, noting the year on the cooperage. Know the barrel’s origin, exactly what it was used for and how many times it’s been used. A quality supplier will know and willingly share this information about the barrels they’re selling. Cleanliness and smell are your two biggest assets when looking at used barrels, so always follow your nose.”

  Moe’s Barrels keeps all of its inventory inside a warehouse and available for buyer inspection.

  “We want to recycle these barrels and give them another life in the business, whether it’s for additional distilling and brewing, for use as furniture and décor or ultimately selling the parts to the artistic community. It’s a way towards sustainability.”

Kentucky Bourbon Barrel: The Name Says It All

  What better place to source local Bourbon and whiskey barrels than in Kentucky, the birthplace of Bourbon and home to the renowned Kentucky Bourbon Trail. Noah Steingracher is the man to talk to for North American and international craft sales at Kentucky Bourbon Barrel, a full service used barrel cooperage, offering used Bourbon and exotic spirit barrels.

  Being right in the heart of the Bourbon Trail in Louisville, Kentucky, Kentucky Bourbon Barrel primarily sells Bourbon barrels sourced locally from all of the familiar names. When Steingracher joined the company, he brought his international sourcing experience with him, so exotic and international barrels are now in play as well. He has sourced used barrels from spirits distributors, breweries, meaderies and wineries for use in finishing and aging a potential customer’s product.

  “We do it all,” said Steingracher. “We sell the used barrels from barrel to stave, depending on every customer’s unique needs. We have contracts with reputable and well-known distilleries to empty and ship their used barrels directly to us. We inspect them using our stringent guidelines for acceptable and unacceptable issues, including the size of any distinguishable cracks. If needed, our experienced team of coopers repair the barrels and make them fit to fill. We fill the used barrel market for customers that may not have the time, expertise or source to fill it on their own, and our experience and reputation are such that we have customers worldwide. I’ve shipped to islands that I’ve had to find on Google Maps. I’ve delivered barrels to the base of the Himalayas. There’s nowhere we won’t deliver.”

  Steingracher told Beverage Master Magazine that the used barrel market is affected by the same seasonal changes that affect all brewers and distillers, as well as how the barrel will be used.

  “A used barrel can function as either a vessel or an ingredient,” said Steingracher. “As a vessel, used barrels are just the holder for the product. For example, if a brewer wants to offer chocolate, porter or coffee stout, a used bourbon barrel fits the need and will provide the expected stone fruit and vanilla notes. But if you want to put out the best coffee stout, you should use a rye barrel so that the unique flavor from the barrel imparts a distinguishable, peppery infused difference. The right barrel will be a noticeable and valued ingredient in your formula.”

  Steingracher noted that brewers and distillers sometimes become too easily attached to the brand stamped on the barrel rather than going with barrels that fit their actual needs, if for no other reason than to associate their brand with that of a particular distillery. 

  “A mindset of only looking towards a brand name rather than filling your flavor profile defeats the purpose of striving for reliability and availability of your product offerings. Craft distillers and brewers can always run into a situation of not being able to find that particular distiller’s used barrel for the next batch. Frankly, they usually don’t even have the marketing rights to use that particular distiller’s name in their marketing. Jim Beam can release up to ten thousand barrels a week, with Buffalo Trace releasing around six thousand a month, and then others like Pappy are obviously extremely limited.”

  “Relationships matter when discussing that reliability and availability,” said Steingracher. “You need to know the type, origin, and age of the barrel you’re getting. With all the variants and combination spirits being distilled these days, what specific type of Bourbon was the barrel last used for? Was a char put on it? What level? Was it toasted? Repaired? How many years has it been used? Barrels can last a hundred years or more if used and maintained properly. The oldest is probably in Scotland, but I’ve personally seen some from aged before World War II. We do buy some back from the distillers that we know care for them the right way, and having access to our cooperage allows us to be able to make the repairs necessary to keep them in circulation. You can certainly come through and check on barrels yourself, but with our regular buyers, they know that the barrels we send them are fit to fill.”

  The flavor and use options for used barrels are indefinite. With many craft distillers and brewers now openly sharing their barrels between multiple brewing cycles, with proper use and care, barrels can last indefinitely. It’s what you can do with them after extensive uses and fillings that become limited.

  The Barrel Mill’s Infusion Spiral Technology Offers More Flavor Options While Decreasing Aging Time

  Options for those barrels, whether new or extensively used, have gotten much greater due to Infusion Spiral technology from The Barrel Mill, a central Minnesota-based cooperage that specializes in premium new oak barrels.

  Len Napalitano is an infusion spiral expert with The Barrel Mill and told Beverage Master Magazine that their infusion spirals are perfect for creating unique flavor profiles and helping distillers get their product to market faster.

  “Sometimes, you won’t find the right barrels for the flavor profile that you want to build for your customers,” said Napalitano. “With each fill, a wooden barrel loses part of its flavor offering and balance, and after three fills, barrels can be neutral regarding any noticeable flavor profile. These barrels are still obviously good for use, and now they can benefit from infusion spirals to regain that lost flavor profile.

You can achieve new oak flavor without the new oak barrel, which can be in short supply at times. Even when used with a new oak barrel, infusion spirals help get your product to market quicker. Our spirals are cut from premium oak, maximizing end-grain exposure for full extraction in weeks instead of months, saving the distiller money in labor, cost and time. The spirals are formed from barrel stave wood, cut through, then put into a convection oven to get their desired toast or char by way of our proprietary formula.”

  Jeremy Wochnick, Sales Professional for The Barrel Mill, said “The spirals range from a light toast to a #3 char depending what the distillers want, and are available in not only the standard, premium oak, but also in French oak and more exotic species like sugar maple, cypress, cedar and more for experimental and unique small-batch flavor profiles. Barrel quality results are obtained using any type of barrel, carboy or stainless tank. The spirals have proven to be successful in spirits, beers and wines as well as hard ciders and nonalcoholic drinks like ginger ale and regular ciders. Infusion spirals can be used to add a flavor profile to anything. We also have packs with blend options featuring different toast levels. The spirals can be used once, and are inserted into your barrel through the bunghole by way of netting or some sort of daisy chain for making retrieval easy.”

  And those infusion spirals, after being retrieved from their time in the barrel? Well, it turns out that they’re a pretty good addition to your outdoor barbecue.

Technology and the Benefits of a Digital Marketing Strategy

Cyndi
Shot of a young woman using a digital tablet in a bar

By: Robert Frost, Principal, Boelter Blue

Competition is fierce! With the number of craft breweries and brewpubs continually on the rise year-over-year, it should come as no surprise that current bar owners and operators must focus on more than just word of mouth, radio ads or the occasional 30 seconds of air time on the local network to create buzz about their business. Developing a marketing plan to maintain visibility and relevance is key to both the initial and ongoing success of your business.

But not just any marketing strategy will do.

A robust and diverse digital marketing plan, one that also leverages mobile technology, will play a significant role with effectively attracting and retaining customers. Utilizing loyalty apps and a variety of marketing automation initiatives will ultimately allow you to spend less time and money on your overall marketing efforts, while simplifying and maintaining your path for continued growth and success.

All of this speaks to the advancement of technology within this space. As such, it should come as no surprise that the role of technology continues to be on the rise, both in terms of what is in the hands of you and your loyal customers – on their phones and through a more personalized interface with your business – as well as the technology your business may currently be utilizing.

The increased involvement of technology is very much a generational change and one that craft brewery and bar owners are recognizing as a means to become better and more productive at what they do. The old saying, “work smarter, not harder” rings true across the board.

Align yourself with mobile technology and mobile marketing

By 2020, 77% of the US population will be using mobile technology daily. It’s the go-to technology for personalized communications. Adding to this impressive statistic is the notion that thirty-five percent of smartphone users are already claiming to use their phones more than 50 times a day—this is where craft brewery and bar owners and operators can make the biggest impact. Personal means connecting with customer routines, moods and of course, discerning taste buds. Data makes it possible—mobile makes it deliverable.

Most consumers expect information to be available at their fingertips. The vast majority of consumers are searching for information about a particular business on their smartphone, with 84% of them contacting that business as a result. An app with your menus, reservation, ordering, payment and delivery capabilities maintain accessibility and convenience. And convenience is a big part of the overall experience that customers are looking for. If too much is being asked of your customers they may abandon your business before ever stepping through the front door.

Attracting new customers, building loyalty and running a variety of continuous promotions requires a heavy investment of time and energy. An automated marketing strategy allows you to focus on what you do best—providing great craft brews and exceptional service. Capture your guests at every touch point with pre-scheduled communications, photo push messaging, social media posts and more. Utilizing a robust app for your business allows you to capture more first-time guests, make your regular guests feel like insiders and remind customers who haven’t visited with you in a while why they should consider returning.

Utilizing technology does not necessarily equate to an entirely new business plan. However, it does mean that you now have an option to execute your current plan better, while also being able to expand and grow them quicker. An example of this is identifying those efforts that you may currently be doing with email, paper punch cards or in-house only promotions and taking that to a mobile and digital platform as a means to obtain more control and visibility for everyone involved – customers and owners alike.

An app has the ability to act as your personal, day-to-day assistant. If you don’t have the time or money to hire and manage another employee, it might be time to look at technology as the employee that never gets tired. With it you can send your loyal customers birthday wishes, offers and alerts, giving them the personalized experience they prefer and deserve. With an automated marketing strategy, you can create a series of push notifications triggered by their activity. Notifications can be sent right away, pre-scheduled or programmed to be delivered in certain scenarios. Either way, it communicates why your business is the perfect option for that moment.

Being social with your media

Customers love to see what is offered before deciding where to go. Show them, don’t just tell them. Instagram and Pinterest are fantastic options for enticing people with tasty-looking and thirst-quenching photos. It’s also beneficial to develop short, unique videos – such as a quick recipe or a behind-the-scenes look at your brewery. And don’t forget to use trending hashtags to increase post visibility. For example, include #happyhour, #newbrew, or #foodielife, along with the name of your craft brewery or bar. All of this will help keep your establishment top of mind with both your regulars and first time customers.

Your customers are always looking online to get ideas when thinking about visiting a new business. To ease this process, make sure that all of your social profiles are up to date and easy to read, as well as portray your business with the correct ambiance. It’s not uncommon for new customers to be hesitant about visiting the unknown. Your social presence needs to provide a compelling reason for them to engage with you. However, never sell your business through a clouded social media lens. Customers expecting one experience based on how your business is represented on social media, only to walk in to something entirely different, will likely result in negatively affecting your business as a whole.

Your social media promotional efforts should also be backed up with an engaging customer-facing website in order to complete the experience. This will further provide your customers with an even better idea as to what they can expect when choosing your business over the competition. Think of a great website as a first handshake, before they commit to visiting your business for the first time. Your website must be mobile friendly so that it can easily be viewed from your phone without distorting the message or making the experience inferior in any way. 

Technology that’s here to stay

This growing trend in technology is a strong reflection as to how business owners are looking to maintain their operations with their distributor – online, expedited, quick-to-answer and respond and capable of addressing all of your needs through a variety of technological channels and initiatives. It would be unfair and, quite frankly, unacceptable, for a distributor to suggest that you engage with your customers through the advancements of technology if they themselves are not capable of providing the same level of service to meet your day-to-day business needs. Technology will continue to impact and affect buyer behavior. This can be seen both from the customers that frequent your establishment, as well as the way that you engage (or want to engage) with them.

Consumer preferences are changing faster than ever, dictating how your business must respond. The distributor that you have chosen to partner with should be in the business of delivering value. When they deliver on value, it demonstrates an understanding of what is truly important. A distributor capable of delivering value and unforgettable experiences is infectious, and it will help you, in turn, deliver unforgettable experiences to your own customers.

A thoughtful and in-the-know distributor should always have the pulse of what consumers want as a means to help you innovate and continually reinvent yourself in order to remain relevant in a highly competitive landscape. When they can adapt and respond with speed and agility, they help you to keep pace, stay relevant and often outpace your competition. Ultimately, their business should be dedicated to helping you succeed with yours, utilizing non-traditional methods to better serve your needs through more interesting and engaging uses of product management, technology and education. While it’s true that people do business with people they like, they also look to do business with the people that are committed and able to execute. Finding a distributor that can serve you better and become a comprehensive, go-to resource for all of your business needs is the end game.

Technology is advancing faster than ever before and it’s here to stay. As a business owner, your digital media strategy should be flexible to more easily respond to what does and doesn’t work. Discover how your customers found out about you to gauge where they’re spending time online in order to maximize those platforms. Cross-link all of your online profiles and link your website to your mobile app and social media pages. In doing so, you’ll be able to strategically cover more ground while building a base of followers on their preferred platform. The end result will likely translate to an increase in new traffic, while also building upon an established foundation of regulars.

Contact Robert at (262) 523-6210 or email him at rfrost@boelter.com.

Robert Frost headshot

A Cider House Divided: Meet the Only Canadian Cider House to Operate in Two Provinces

Cyndi

By: Briana Tomkinson

stack of sarah cole beers

The craft cider industry in Canada is small but growing. Consumers in Ontario, Canada’s most populous province, are increasingly turning to cider when selecting alcoholic beverages, and the drink is trending upward in other provinces as well.

  Yet as one Quebec cider producer found, it’s harder than it seems for Canadian cider houses to expand sales into other provinces, even when their production facilities are virtually next door. 

  Sarah Cole Cider was founded almost five years ago by Pierre Bissonnette and wife Nathalie Laurin in small-town Lachute, just over an hour’s drive from Montreal. Bissonnette’s back-ground was in the textile industry, but he was ready to make a career change and set his sights on entering the craft beverage industry. 

  Bissonnette considered opening up a microbrewery but decided there was too much competi-tion in the beer industry. He flirted with the idea of making wine but decided in the end to ex-plore the emerging cider market. It didn’t hurt that he already owned an established orchard.

  For 23 years, Bissonnette had lived with his family on a sprawling equestrian ranch in St.-André-d’Argenteuil, just outside of Lachute, and he had always dreamed that it could be more than just a beautiful place to ride horses. The property features a sugarbush and a small vine-yard, but in the end, it was the orchard that inspired Bissonnette to reinvent himself as a craft cider producer. The cidery’s name comes from two of Bissonnette’s horses: Sarah and Cole.

  Contrary to some other Canadian cider producers, who have followed the craft beer trend of developing a large variety of creatively flavored products, Bissonnetted decided to zero in on perfecting a limited selection of distinctive dry ciders. He narrowed the recipes down to three: Whip, a European-style dry cider, Snaffle, which he likened to a Prosecco, and a non-alcoholic option cheekily dubbed Mountie, the nickname of Canada’s Royal Mounted Police.

  “Dry cider was missing in the market. Customers found most ciders too sweet,” he said. “The ciders on the market that were dry were tasteless.”

  Initially, Bissonnette focused on selling bottled cider in grocery stores and dépanneurs (what Quebecers call the convenience stores that sell alcohol), but quickly realized the difficulty of standing out on crowded shelves as a still-unknown brand. He decided to switch gears and concentrate on getting his cider into Montreal bars and pubs, and getting customers to try Sa-rah Cole’s distinctive taste.

“Our strength is taste,” Bissonnette said.

  Montreal’s bar and pub owners are a chummy bunch, and Bissonnette said he found once he was able to place his cider in a few top-flight locations like the Burgundy Lion pub and Bier-Market, and hotels like the Fairmont and Sheraton, it became easy to get Sarah Cole on tap in other local hot spots. “It’s a small world. Once one pub discovers us, a whole bunch follow,” he said.

  When Bissonnette submitted Sarah Cole’s flagship Whip cider to judges at the World Cider Awards in 2017, he didn’t expect much to come of it. When he won the Canada Sparkling Dry Award, it turned out to be a game-changer. Doors began to open for Sarah Cole, and Bis-sonnette began to set his sights on growth beyond Quebec. In particular, he hoped to break into Ontario, where sales of locally made craft cider grew 54% between 2015 and 2016. How-ever, cross-border distribution of his cider would be more challenging than expected.

  “If you have a vision to sell outside your own province, it is tough,” he said. “It’s the provinces that make the barriers.”

  One of those barriers was taxes. When he did the math, Bissonnette found that factoring the cost of paying taxes in both provinces would require him to increase the price of Sarah Cole cider beyond what the Ontario market would bear.

  In Ontario, Sarah Cole cider would be primarily distributed through the provincial Liquor Con-trol Board of Ontario, which regularly spotlights homegrown products. Although Lachute is less than a half-hour from the Ontario border, being on the wrong side of that line would exclude Sarah Cole from being featured alongside the locals.

  Strategically, Bissonnette decided there was an advantage in entering the Ontario market as an Ontario cider house, as opposed to a Quebec import.

  That’s how Sarah Cole came to be in the unique position of having not one but two cider hous-es, making it a “local” producer in both Ontario and Quebec. It’s been one year since Bis-sonnette took the leap and opened an Ontario production facility in Vankleek Hill, right across the street from craft beer heavyweight Beau’s Brewing, and he said the risk has paid off.

  “Cider sales are just not comparable between Quebec and Ontario. Here in Ontario, the people already love cider; you don’t need to convince them,” Bissonnette said. “In Quebec bars, there is often only one cider on tap. In Ontario, there can be up to four or five.”

  Bissonnette said there is also a noticeable difference in culture among Quebec cider-makers compared to Ontario. In Quebec, he said, the cider industry is very competitive and tends to be marketed like wine. In Ontario, more cider producers are taking their cue from craft beer.

  According to information on the cider industry released by the provincial government, there are now 70 businesses producing cider in Ontario. The craft cider industry is now estimated to contribute $12.7 million to the provincial GDP. Cider sales at the LCBO in 2017-2018 were over $11.5 million, an increase of 42% from the previous year.

  According to the latest data from Statistics Canada (from 2016-2017), while beer remains the booze of choice for Canadians, representing 40% of total alcohol sales—$9.1 billion annually—the market share of other beverages is growing. Wine sales are growing, and now represent 32% of total alcohol sales.

  On a per-capita basis, Canadians of legal drinking age drink an average of just over 200 cans of beer per year, compared to only 20 cans of cider. While the market share of ciders, coolers and similar beverages remains tiny in Canada, this segment of the alcoholic beverage market is dynamic and growing.

  Tastes have been gradually trending toward cider and coolers over the past decade, with an average annual sales growth rate of 6.4% in this category since 2007. Growth of imported beverages in this category was stronger than Canadian products, increasing 13.9% annually compared to 4.6% for domestic brands.

  Sales of ciders, coolers and other refreshment beverages in Canada totaled $0.9 billion in 2017, an increase of 8% year-over-year. Ciders and coolers are most popular in the Yukon, with 7.2% market share, and least popular in Quebec, representing just 1.2% of alcohol sales.

  In May, the governments of Canada and Ontario announced a joint investment in Ontario craft cider production through the Canadian Agricultural Partnership to support cideries to expand into new markets and increase productivity.

  Canadian consumers’ growing interest in cider is now drawing attention from larger beer manufacturers, Bissonnette said, which is increasing competition in the industry. Canadian beer giant Labatt bought Quebec’s Lacroix cider last fall and is using its marketing muscle to edge out smaller players like Sarah Cole.

  Although Bissonnette has lost some market share to Lacroix since the acquisition, he said there is a silver lining: in promoting Lacroix, Labatt must convince Canadians to consider cider as a beer alternative, which could ultimately increase the number of consumers willing to give other ciders a try as well.

  “The cider industry has been sleeping,” he said. “No cider house has the money to put cider on the map like Labatt does.”

Safety and Compliance: More Than Just a Checklist

Cyndi

By: Tracey L. Kelley

Portrait of smiling worker holding clipboard by storage tanks

In the past 10 years, workplace injuries and illnesses declined in the craft beverage manufacturing industry. This is good news, as it’s a thriving employment sector. The U.S. Bureau of Labor Statistics reported that in 2016—the most recent data collected—breweries, distilleries and other artisanal beverage producers employed approximately 75,000 people. In Canada, according to information from the System of National Accounts in 2018, the craft industry had more than 15,000 workers.

  Some experts say a reduction in workplace incidents is the direct result of an attitudinal shift from reaction to prevention. Ashley Heiman is the MRO department manager for Nelson-Jameson in Marshfield, Wisconsin—a single-source food, dairy and beverage processing plant supplier. Heiman explained the vital importance of this approach. 

  “The Food Safety Modernization Act created a significant culture shift. The essential question that the FSMA pushes us and our customer base to ask is, ‘How can I most effectively and proactively create a safe, quality product?’” she told Beverage Master Magazine. “When you think proactively about your product, it pushes you to think proactively about your facility and the staff that produces that product. From floor drains to dust collection in your rafters, every facet of your facility and those operating that facility can make or break a brewery or distillery.”

  Established in 2011 by the Food and Drug Administration, FSMA compliance extended to beverage producers at a graduated rate. It began in 2016 for companies with over 500 full-time employees, scaling down to “very small businesses”—those with beverage sales of less than $1 million—finalizing compliance in September 2018. Inspections of beverage raw materials started this year. For some producers, this compliance required extensive examination and overhaul of processes and systems.

  One might assume that requirements by OSHA and the FDA already cover worker and product safety issues. In many ways, they do, but this additional layer of compliance mandated by the FSMA is a necessity for consumer products. It’s also another thread of bureaucracy to follow—one of many that can be challenging to untangle. 

  “It’s very difficult for business owners to dedicate time to learning all the nuances of compliance to both OSHA and the FDA. They’re really interested in creating and growing their businesses, so having a consultant who’s knowledgeable in these compliance areas allows the owner to both focus on the business and ensure that someone is keeping them compliant,” said Gary D. Morgan, Vice President and senior consultant of SafeLink Consulting in Cumming, Georgia. He’s also an authorized OSHA outreach trainer.

  “Our business is to know everything we can about OSHA safety requirements and FDA regulations on producing beverages that are safe for the public to consume, so we keep our clients as informed as possible in these areas,” Morgan said. He also pointed out that the Canadian Centre for Occupational Health and Safety and its Food Inspection Agency mirror OSHA and the FDA requirements rather closely, so producers sharing a national border are assured of similar compliance between partners.

Create an Environment of Safety

  Doing what’s best for the product starts with the optimum workplace atmosphere and training provided to employees. Ideally, owners and managers should establish these best practices in the early stages of the business.

  “Bringing a consultant onboard at start-up can ensure decisions can be made in the development stage that takes into consideration compliance issues for both OSHA and FDA,” Morgan said. “Trying to retrofit safety considerations into an existing design can be costlier than providing for it upfront. Implementing an FDA-compliant quality system initially can also prevent or handle issues in producing a product that’s fit for consumption.”

Morgan advised that instead of evaluating consultants by price, first outline facility specifications.

  “Then, I would suggest that as part of due diligence, talk to several consulting firms and ask the same questions of each one to ensure an apples¬-to-apples comparison, rather than just looking solely at pricing. A producer should include expenses for these services in the annual budget.”

  Another top-to-bottom safety solution, Heiman said, is color-coding. “We’ve seen a great interest in it. It’s proven to be an excellent proactive approach. Not only can color-coding help prevent cross-contamination in terms of allergens or yeast strains, but it also helps to organize and streamline workflow, designates critical control areas of a facility and assists many of our customers in isolating possible pathogen risks,” she said. “With the wide variety of products we offer, facilities can build a color-coded program to break up their operations into pragmatic zones.”   

  Josh Pringle is the vice president of CO2Meter in Ormond Beach, Florida. His company specializes in the design and manufacturing of gas detection and monitoring devices—mainly CO2—as well as consultancy and training. He advises producers not to rely on state or local inspectors to tell them to improve ventilation or install monitors: do it because it’s what’s best for your employees.

  “Producers should consider the following when preparing to train or educate staff: what’s in the best interest of our employees, what does our insurance provider require us to do, what will OSHA/NIOSH expect as part of a training package, and how should we plan to test and retrain staff,” he told Beverage Master Magazine. “We have a brewing partner who made the following statement: ‘Why would I pay a few hundred dollars for a safety monitor and then not train my staff on what to do if it goes off? Pointless!’”

  Pringle noted that many professional associations offer free training regarding CO2 safety, proper lockout/tagout procedures, and dozens of other critical topics.

  These organizations include, but are not limited to:

•    American Distilling Institute

•    Brewers’ Association

•    International Beverage Dispensing Equipment Association

•    Master Brewers Association of the Americas

•    WorkSafeBC

  OSHA and NIOSH also have online training, workbooks, visual aids and other resources for new employee and refresher training.

  He cautioned against complacency in your facility. “When employees work in and around hazardous situations, materials, ingredients and situations, no duty should be considered mundane or a ‘to do.’ Safety is an every moment, everyday project,” Pringle said. “The statistic always sited from the National Transportation Safety Board is the majority of car accidents occurred within five miles of someone’s home. The data demonstrated that drivers started to let their guard down in more familiar surroundings. Employee safety has no mileage areas. Any training that allows for complacency is flawed.”

  Morgan agreed. He offered these three tips:

1.  Always be vigilant to compliance issues. Oversight is demanding.

2.  Delegate responsibilities to duly-trained and competent individuals.

3.  Training is an ongoing activity, not a one-time event.

More Than a List on a Clipboard

  Workers in the craft beverage industry are prone to the following injuries and illnesses:

•    Overexertion, including medical conditions caused by repetitive motion or lifting heavy items such as barrels, kegs and crates.

•    Slips, trips and falls because of slick floors, ladders, obstacles and carrying heavy loads up and downstairs.

•    Working in fermenters, tanks, vats and other confined spaces, especially when carbon dioxide exposure is a concern.

•    Physical hazards such as pressurized equipment, forklifts, temperature extremes, and moving parts.

  It might require specialized products, protective gear, and consultation to maintain essential worker safety. “Safety concerns are widespread across a facility. Personal protective equipment, noise protection and respiratory protection are some of the most common product areas we deal with for our brewery and distillery customers,” said Heiman of Nelson-Jameson. “Lockout/tagout products are also popular. Additionally, it’s important to be specific with vendors if employees are handling chemicals, lab reagents, machinery, and so on. These details dictate the best products to utilize.”

  Even with a safety plan upon start-up, and as Pringle of CO2Meter expressed previously, crafting operations are integrated with safety in handling not only CO2 but throughout all functions. So the plan becomes more of a living document, refined by training, to help staff anticipate and correct issues before a more significant problem occurs.

  Here are the steps Pringle recommended:

•   Identify the hazard

•   Discuss the hazard

•   Create a plan of action to prevent the hazard

•   Create a secondary plan that accounts for and mitigates the hazard

•   Define methods to disperse the hazard

•   Understand the methodology to test an area to ensure safe conditions

•   Create and institute a policy and procedure to understand an incident

•   Create a safety plan

•   Including safe zones and rally points

•   Practice, practice, practice

“Be mindful. Be aware, Follow procedures, no matter how cumbersome. For example, lockout/tagout has become a mainstay because it’s effective,” Pringle said.

  Regarding C02 specifically, “The most likely points of CO2 incidents for beverage producers are at their canning and bottling lines. ‘Dosing’ areas typically register CO2 concentrations above the OSHA– and NIOSH–permissible time-weighted average standard of 5,000 ppm TWA for employees—placing a typical producer in violation,” Pringle said. “While working around CO2 can often be a necessity for beverage staff members, having proper training sessions and ensuring your staff is informed on the dangers of CO2 is the first step.”

  Morgan of SafeLink Consulting had some final thoughts. “Be proactive in establishing your compliance programs. If you have to be reactive, then something negative has happened that could be very detrimental to the business itself. It could be an employee injury or complaint, or a product that causes consumer complaints or worse, consumer injury or illness,” he said.

  “And there’s always the ever-present specter of an inspection from a regulatory agency with fines, penalties and even forced business suspension or closure. Give yourself peace of mind by being on top of compliance issues, not at the mercy of them.”