Standing on Shoulders

craft distillery facility

By: Donald Snyder

Ask any established craft distiller what they would have done differently and you will get a common answer, “How much time do you have?” For most new distillers starting from scratch in the last few years, it was a learn-as-you-go venture paved with blood, sweat, and tears. The promise of high margins in an exciting and rapidly growing industry with local laws now changing to be more “craft friendly”, the draw to join the liquor industry today is almost intoxicating. Today, new craft distillers are starting up following in the footsteps and standing on the shoulders of those who came before them to bring something new and unique to the market.

  There are over 800 active micro distillers in America and dozens more opening every month. Domestic and international consumers have developed a palette for unique distilled spirits and have not seemed to quench their thirst for all things different and local. If that wasn’t a big enough reason to join the party, there is now a wealth of resources available to get started without repeating the painful road paved by others.

  An aspiring distiller today does not need to look very hard to find resources to help them start up a new distillery. There are distillation classes across the country offering everything from a hands-on introduction to the distilling industry, chemistry-based fermentation and mashing lessons, blending and product development classes, to advanced distilling techniques classes for those looking to sharpen their craft. As a lecturer at both the Moonshine University in Louisville, KY and at the Six & Twenty Distilling class in Greenville, SC, I get to give people a taste of the industry before they decide to jump in with their hard earned money. Being able to touch, look, and feel for a few thousand dollars can be well worth it.

  Another hands-on and immersive way to learn about the spir  its business are the annual craft distillery conferences with break out informative sessions for all levels of experience. The American Distilling Institute (ADI) and the American Craft Spirits Association (ACSA) both have annual conferences where all the players in the industry converge to discuss current market trends and distillation issues of the day. For new players in the business, the biggest advantage of these conferences are the vendor booths which are a literal one-stop-shop for all the suppliers you will need to start a craft distillery. Imagine having every major glass bottle supplier, chiller and equipment vendor, grain sources, and even the Tax and Trade Bureau (TTB) all represented and able to answer your questions in one space. I hear the established craft distillers groan every year having had to research and hunt them all down one by one.

  However, even before an aspiring distiller books an air plane ticket to a conference or to a class, there are now vast repositories of information available on-line. There are several popular and active forums and blogs on-line with communities of distillers sharing their experiences and responding to questions. One of the most active is the ADI Forum where new and established distillers talk about the issues du jour and share techniques. There are active home distilling forums with resources as well but I’ll remind everyone that distilling spirits without a federal permit is currently against the law.

  Finally, once a person is ready to start a distillery, there are now a plethora of consultants with years of experience in the distilled spirits industry. There are consultants for every specialty, issue and budget. There are consultants like Richard Wolf of Wolf Consulting who can help prepare a solid business model including cash flow, cost of good sold (COGS) and profit projections to help articulate capital needs and find investors. Consultants like Jim McCoy, who retired from the TTB after 32 years, can help navigate the licensing, federal permitting, or audit headaches and assist with label or formula approval. Sherman Owen of Artisan Resources can help with developing a mash bill, fermenting, distilling, equipment sourcing and may other tactical operational issues. There are retired master distillers who worked for the large distilleries who can help teach the up and comers how to make a high quality product while leveraging their connections in the industry. Nancy Fraley of Fraley Nosing Services can help with blending and differentiating your product in a crowded market space. There are even “one-stop-shop” consultants who act like a general contractor that can walk a distillery from concept to reality while bringing in specialized consultants and network resources as needed.

  With all that said, even with all the incredible resources available, it can still be a hard and expensive road to travel. A typical new craft distillery will require hundreds of thousands of dollars in equipment and investment. Older buildings will need expensive renovations to be both visually appealing and up to local code to operate a still. A green field distillery built from scratch sized to expand could easily cost a half million dollars or more. For distilleries hoping to make an aged product such as a bourbon, they must prepare to spend a thousand dollars per barrel in raw materials, labor, and other conversion costs and see no return on that capital until it is dumped and bottled. Cash flow and operational reserves for a startup distillery can easily trip up even the best business model. It is possible to start a distillery on a “shoe string” budget, but it is a tough road to travel.

  If you are considering opening a craft distillery, know that there have never been more resources at your disposal. It is not an easy or cheap road to go down but the return can be big. Reach out to a local craft distiller, make a connection with a consultant for an introduction, or be an active participant on-line and you will be well armed to decide if your next business card will say Master Distiller.

Forecasting Business Plans in Uncertain Times

How to Plan for the Fiscal Future in 2024

a robot hand and a human hand both pointing to a dollar sign

By: Raj Tulshan, Loan Mantra

Over the past few years, small business owners have seen dramatic changes in the financial landscape, with an array of challenges and an uncertain future. Several years of global disruption have left small businesses on a rollercoaster ride, facing a global pandemic, supply chain disruptions and ongoing labor shortages. Recently, despite rising inflation and bank failures, small businesses experienced some good news, with cryptocurrency going mainstream, an increase in diverse small business owners, a rise of Artificial Intelligence (AI) in the workplace and more. As we welcome 2024, let’s review a few highlights of 2023.

In 2023 small businesses reported becoming more optimistic, predicted a growth in revenue and planned to hire more staff in the coming year.  They anticipated making higher investments in their companies moving forward. What’s more, we saw an increase in diversity among small business owners, and a rise in the number of small businesses across the country, which account for an impressive 99.9% of the businesses in the U.S. 

While the economic outlook improved in 2023, there are no guarantees that 2024 will be the same. And, as the new year begins, many businesses remain hesitant about the road ahead. It’s human nature to want to predict the future – and in the business world, vital for owners to have a plan to move forward. The one constant is change. Financial service professionals can help business owners and leaders manage these economic and cultural shifts to stay adaptive and resilient during the coming year and for years to come. While no financial expert has a crystal ball, there are key factors that impact the fiscal future. Here are financial considerations for making business plans and strategies that will work today and tomorrow.

The Rise of Artificial Intelligence (AI) and Machine Learning (ML)

AI and ML technologies are already being used in fraud detection and investment research in the Fintech industry. ChatGPT is a new tool that is generating interest in average consumers who have interacted with it out of curiosity. Chatbots are already augmenting customer-facing service roles, increasing speed and simplifying complex transactions. Personal finance, budgeting, operations and management apps are becoming integral for business owners who want to use business data to take control of revenue and meet financial goals. Adoption of these technologies and resulting changes present large business opportunities – and a quantum shift for the business over the long term.

Digital Payments and the Blockchain

As was seen during the pandemic, the shift to digital payments continues to accelerate. Further declines in cash usage will be seen with an upsurge in alternative payment methods, including cryptocurrencies. In 2023 we saw cryptocurrencies go mainstream as patrons used crypto to purchase goods and services, real estate and more. At the same time, governments worldwide are exploring cryptocurrency regulations.  In 2024, expect to see clearer guidelines and potentially greater acceptance of cryptocurrencies in mainstream finance. In addition, the standardization of one central currency may appear called the Central Bank Digital Currency or CBDC.

The CBDC has become a highly charged issue as adoption of it would be controlled by a central entity with likely ties to a social credit system for consumers. Consumer advocates warn that the use of this would put unfettered power and control in the hands of those controlling it. The World Economic Forum states that a CBDC would forever change the relationship between the public and their money with an end to private accounts and choice over what is purchased by individuals.  The WEF states their plans are to monitor every purchase made and eventually restrict what a person could spend their money on and when. This means proposing limitations on travel, dictating how much protein is consumed per week or even collecting carbon taxes directly from accounts without personal choices of the account holders. A CBDC account could be turned on and off at will, restricted based on that individual’s social behaviors, political leanings, religious belief systems and health choices (imposing mandatory experimental vaccines, for instance) and penalize those that don’t go along with centralized dictates.

Interest Rates and Inflation

High interest rates and inflation have a direct impact on those that seek commercial loans and how much funding is available. With an economic constriction, the availability of credit opportunities for business will lessen. As challenges mount, it will be more important to have a financial education. Financial literacy is gaining recognition as a crucial life skill. In 2024, there will be a growing emphasis on financial education, with schools, organizations and governments working to enhance people’s understanding of money management.

Redefining Retirement

The concept of retirement is evolving.  More individuals are opting for phased retirement or exploring flexible work options.  This trend will continue in 2024 as people seek purposeful post-retirement activities and income streams. People will also seek more control over their money in the coming year with the use of personal financial apps becoming integral for money management.  In 2024, expect these apps to offer more sophisticated features, from AI-driven budgeting to customized investment advice, empowering users to take control of their finances.

It’s also vital to note that in the wake of the upcoming election, social security and Medicare reform will be at the bottom of the United States government’s political to-do list. Alternatively, on October 31 2023, the White House announced a Retirement Security Rule, which legally protects consumers seeking financial guidance.

Sustainable investing is also gaining momentum.  Investors are seeking opportunities that align with their values, focusing on companies making a positive environmental and societal impact. In 2024, this trend will continue to grow as investors emphasize responsible investment choices.

Hitting the Debt Ceiling.

As the past year saw banks collapse, new debt ceiling highs and potential interruptions of government created anxiety and lack of confidence in political leaders. These actions will give rise to new bank systems, options and alternatives to banking. Decentralized Finance (defi) is also reshaping traditional banking and finance.  In 2024, we can anticipate more DeFi projects and platforms emerging, offering decentralized lending, borrowing and trading options.

Economists Predict Soft Landing

According to J.P. Morgan Wealth Management, Looking into 2024, strategists now expect that while the U.S. economy is likely to slow, it should avoid recession. The lower likelihood of a painful economic crash should help with financial decision making going into the new year. Other economists are skeptical that the U.S. can maintain economic growth with interest rates so high. The Conference Board predicts slow GDP growth slowing means a “shallow recession” in the first half of the year. The nonprofit research group said wage growth is slowing, pandemic savings are declining, and U.S. household debt is spiking.

At the same time the labor market is resilient heading into the new year. The unemployment rate has risen to just 3.8%, and the economy has averaged more than 250,000 jobs created per month over the past three months. The Federal Open Market Committee projects the U.S. unemployment rate will average a healthy 4.1% in 2024, still well below its long-term average of around 5.7%. The firm said softening consumption, coupled with rising interest rates, will also weigh on U.S. business investment in early 2024.

With these points in mind, plan for the coming year knowing that the ability to be flexible, adaptable and agile will be of significant benefit.

Raj Tulshan is founder and managing partner at www.loanmantra.com. Reach him via Linked-in at https://www.linkedin.com/in/tulshan/.

Hand Barrel Bourbon: Three Friends, One Idea and the Perfect Partnership

photo of 3 small hand barrel bottles in different colors

By Gerald Dlubala

We’ve all heard the phrase about loving it when a plan comes together. When it’s a plan that three friends come up and run with, we love it all the more. And that’s just what happened to Jim Hand, Scott Pirello and Beorn Brueckner, founding members of Hand Barrel Bourbon Company.

“It kind of started when I got recruited by Scott Pirello, a college friend, to play on a men’s softball team,” said Hand. “Scott was working on a project to make cool bottles for packaging. I thought it might be cool to make a whiskey bottle that resembles a real barrel and fill it with quality whiskey to sell. The initial idea was honestly as simple as that.”

Hand and Pirello were both fans of brown spirits and always considered the whiskey industry an exciting arena. They also believed that their bottle idea might just be good enough to attain what would become their first goal of surviving their first year in business. Well, they’ve not only reached that goal, which occurred the last week of October 2023, but they’ve done very well in their first year with an idea that admittedly seemed backward.

“Our approach was different, going from packaging first to the product inside,” said Hand. “But getting into the spirits market without some huge backing is tough. We brought in a third partner, Beorn Brueckner, who attended high school with Scott. Beorn was the GM of a bar in Boston during the pandemic and was now looking for something else. His industry experience fits in perfectly with what we needed, and he currently runs many operations within the company. Scott is our CEO and numbers guy. Additionally, Scott has an entrepreneurial background and experience starting and selling businesses. Without him, there would be no Hand Barrel Bourbon. He had the know-how to start this thing up and run with it. I come from a software sales background and now handle the sales and marketing aspects of the business. So, that’s the whole company, three friends and equal partners.”

Using Unique Packaging to Tell a Story

Hand tells Beverage Master Magazine that it came down to three friends getting together with an idea for a different and unique packaging idea and decided to put premium bourbon into it to sell to the public. Hand says that they knew they would run the risk of consumers thinking their bottle may just be a gimmick to sell their product. But the Hand Barrel Bourbon bottles are instead a motif, providing packaging that tells a story of what is inside the bottle. 

“We sell our single barrel, small batch in the white barrel bottle, signifying the unique minerals and deposits found in the Kentucky water,” said Hand. “Our double-oaked comes in a black, charred finish bottle, signifying the barrels and type of exposure the spirit encounters along its journey. These are specific ingredients and attributes to Kentucky bourbon whiskey, and we want to recognize, respect and make note of those attributes through our packaging.”

Partnering with the Right Contract Distiller is Key

After settling on the bottles, packaging, and message they wanted to send, the group had to find a contract distiller. Hand says they didn’t have the time or capital to start up and wait five or six years, so the search was on to find the best partner for them and their situation.

“We happened into Bardstown Bourbon Company in Bardstown, Kentucky,” said Hand. “We tried their products, looked at their facilities and met the people behind the brand. From that day forward, they became the perfect partner and our contract distillery. It really was a slam dunk for us, and we are now completely vertically integrated with them. They are a state-of-the-art distiller with the best column in the industry. It is our mash bill that we use, a 64-24-12 sweet mash recipe. It’s not the traditional higher corn content (70 to 78 percent) of many bourbons. We wanted to try something a little different. There aren’t as many high-rye mash bills out in the market. We come in at 105 proof, which we believe is the sweet spot for bourbon and the perfect place to land. And because our bottles are preprinted, we don’t deviate from that number. Our barrels age at Bardstown’s facilities, and we use their blending team and bottling line. Our responsibility is to provide the mashbill, the marketing and the cool bottles to package our product.”

Hand says its goal is to provide a bourbon experience that positively appeals to all the senses, including touch, sight, hearing, smell and taste.

“We want our bourbon to be a total experience,” said Hand. “It’s an excellent-tasting, authentic Kentucky bourbon whiskey wrapped in a unique bottle that consumers will proudly display in their home or on their bar.”

One of those unique bottles was a special-release camouflage bottle.

“All three of us have connections or ties to the military somehow,” said Hand. “The camouflage bottle was our first special release and offered us the opportunity to give back 10 percent of sales to the Special Operations Warrior Foundation (SWOF) to benefit families of our fallen Special Operators. We feel that anytime we can give back to one of our military organizations, it’s absolutely worth it. It was a huge success, and we’re looking into other partnership releases. We’re considering things like NCAA or professional sports teams as well as personalized bottles for special occasions”.

Hand says their bottles would make perfect gifts for weddings, groomsmen’s and bridesmaids’ gifts or to celebrate and commemorate special occasions for clubs, groups and organizations. He also mentioned single-barrel picks to make the occasion even more distinctive.

“The bottle is one thing we can change to meet our customer’s special occasion needs,” said Hand. “That’s our edge in the marketplace. You can really only stretch one mash bill about three different ways, ending in a small batch, single barrel and double-oaked, similar to what we did. But we can also change the bottle to create something unique, distinctive and special for our customers.”

Pinpoint Focus and Smart Decisions Will Shape the Future

“We’ve been in business and on shelves for over a year now,” said Hand. “We started in just two states, Massachusetts and Kentucky. We had a minimal release our first year, maybe 6,000 bottles, and sold out within the first two to three months. That was a testament to the acceptance of our idea and gave us the confidence to try to gain market share. We’ve since added 19 more states to our distribution areas and are looking toward expansion and continued growth. We’ve had talks with Canada, South Korea and Japan, who all have interest in our bottles.”

“You know, we have a potentially wide footprint with customized bottles,” said Hand. “It’s a lot of fun, but it’s also very daunting because we can go in many different directions. Since our path can go in so many different and diverse ways, we, especially as a small business, must focus on the best opportunities for us. If we have so much as a flop of 2,000 to 3,000 bottles, it would be very detrimental to us. We have to be careful about our choices and focus on what we need to do to build our business and gain customer commitment. We have to focus on who can commit to the best volumes early to get that extra volume and padding for us as a business. We’d love to eventually be able to do as little as six to 12 bottle orders for weddings or parties with names and dates, offering that custom gift for the guy or girl who has everything.”

Joining the Welcoming Community of Distilled Spirits

“The biggest surprise I’ve had along this journey is the general welcomeness of the bourbon industry. I mean, it really has been noticeable,” Hand said. “I was sitting with other bourbon reps trying to launch a market, and we were all sharing drinks, ideas and information. Unlike some other businesses, there weren’t any highly secretive behaviors or unwillingness to share our experiences. It helps everyone to grow with a better chance of success. This industry uniquely welcomes newcomers; everyone I’ve come into contact with has been willing to help and give quality advice. This industry is such a big piece of the overall spirits pie that we can all succeed. It doesn’t have to be one or the other, which is a truly refreshing and beneficial approach. Spirits consumers traditionally welcome variety. We love to build our bar cart with a variety of diverse brands. It’s just fun to build your display to share with friends, whether for a hobbyist or a serious collector. It’s a pretty straightforward sales approach.”

Displaying Products Together Boosts Sales

Hand tells Beverage Master Magazine that he learned a ton about the industry, which was expected. What sticks out for Hand and the other founders of Hand Barrel Bourbon is that along their path, they’ve noticed a distinct advantage to having all their products together on a shelf displayed as a suite or grouping. Because of their unique bottles and the meanings behind those bottles, when the products all stand together in unison on a shelf display, they combine to show and tell a story that ultimately leads to an increase in sales. Hand Barrel Bourbon’s sales are better when their products stand together, even if that means giving up less width on the shelf in return.

“When it comes down to it, we are just three friends who raised a little bit of money and came up with an idea that we thought was pretty cool, and we want to make an impact on the market with quality products that we are proud to offer, and that consumers are equally proud to own.”

Find more information on Hand Barrel Bourbon at www.handbarrel.com.

How to Disrupt the Beverage Industry with New Marketing Strategies

Jorge Olson

By Jorge Olson — Co-founder & CMO of Hempacco and Green Globe International, Author of “Build Your Beverage Empire

The beverage industry is growing rapidly, with innovators entering the space year after year touting the next big idea. The global beverages market is expected to grow from $3.56 trillion in 2023 to $4.39 trillion by 2028 at a CAGR of 4.26%, allowing room for disruptors to enter the space, especially considering two of the largest growing categories in the beverage industry are hemp beverages and mushroom beverages.

If you are set on being one of those disruptive entities in the beverage industry, you will want to devise some novel marketing strategies that will set them apart from the competition. Those entering the beverage industry or seeking to retool their marketing approach need to consider several factors, including budget, target audience, and branding.

Entering today’s beverage industry

The beverage industry comprises a litany of products, from ales and liquors to flavored seltzers, hard teas and lemonades, and more. As consumer demand grows, innovators in the beverage space churn out an abundance of ever-expanding options, and as markets continue to grow, more opportunities arise for beverage companies to get a foothold.

With over 2,000 beverage companies in the United States alone, effective marketing is more important than ever before. Marketing builds awareness of your brand and is especially integral to launching and growing new businesses within the beverage space.

The cost of launching and scaling a new business — especially one tied to a physical product — can be high. If you are seeking to disrupt a long-standing industry with a new product idea, you must be savvy about your marketing budget to have the greatest impact and bang for your buck.

Every marketing strategy begins with a great idea that should be formed with consideration to what consumers are seeking but not finding in the current market. The beverage’s formula should be consistent before being unleashed onto the market, and the opinions of experts and stakeholders should also be considered. Being thoughtful about your actions before launching can help you avoid costly (or embarrassing) mistakes.

The beverage industry is incredibly competitive, but with the right product and the right marketing strategies, your product can make considerable waves.

Innovative marketing approaches

In an industry that can be as crowded as the beverage space, new businesses will be required to think outside of the box concerning marketing approaches. The old standard marketing strategies will not likely garner enough engagement to disrupt such a massive industry.

Savvy marketing can also help consumers create an emotional connection to your brand. Many beverages can be connected to moments or memories for consumers — that bottle of Coca-Cola they shared with their dad on a fishing trip or their very first beer when they turned 21. Tapping into these emotional markers can help elevate a brand and solidify the brand’s story within the current culture.

There are several innovative marketing strategies that your beverage company can leverage, but your chosen strategy (or strategies) should depend on the market you are targeting, your specific product, location, budget, and several other factors. The thoughtful pre-planning discussed in the previous section will help determine the right strategy to meet their goals.

Social media marketing

Social media marketing is nothing new, but it is constantly changing. It seems that with every introduction of a new platform or a change in an algorithm, the goalposts for marketers are moved.

Today’s approach to social media marketing utilizes a variety of platforms for a diversified strategy. TikTok is still going strong as the platform of choice for many Gen Zers, but older generations may still prefer Facebook or Instagram. This means you can capture a larger slice of your target demographic by splitting marketing among the various popular platforms.

Social media is still suitable for quickly sharing content with a large number of people and is still the best way to create a personal connection with your target market. By engaging with people across the platforms, answering questions, and sharing content they want to see, you can grow your social media following and brand recognition.

Even though social media is not a new marketing tactic, it is constantly changing and creating new hurdles for business owners. Remaining aware of changes and best practices will allow you to get the most out of social media use.

AI and new technology

It seems like everywhere you look; artificial intelligence (AI) is taking over. For marketers who know how to harness its power with predictive analytics, AI could revolutionize how products are created specifically for consumers. Through AI technology, consumer products like beverages can be designed to exactly what customers want and marketed to the market at large based on what they want or need.

Through AI-enabled packaging creation, specific segments of a market can be targeted and catered to. Branding, ingredients, feel, and culture can be considered — allowing businesses to elevate their new product above other products in the market.

AI also allows companies to gather data on consumer reactions to marketing campaigns quickly and accurately. With this data, businesses can quickly assess whether a campaign is working — or if they need to shift focus.

High-quality content marketing

The best brands are not just products on a shelf. They are entities with which people develop connections.

To help foster those meaningful connections, businesses should focus on creating high-quality content around their brand. This can include blog content that shares brand-related stories or learning opportunities. It can also include video content showing behind-the-scenes making your beverage product or people enjoying it in real-life scenarios.

The focus of your content marketing should be quality and engagement, so take a look at what your competitors do with their own content marketing and strive to do something different. Quality content marketing can drive new sales, create new customers, and help you unveil new products.

Paid advertising

Like social media, paid advertising is not a new approach but is being approached in new ways. As we enter the new year, video is still ruling the internet, so incorporating video content into your paid online ads will allow your ad to stand out over the ads that feature only static images or simple copy.

When approached correctly — and with your target market always in mind — paid ads can be incredibly effective. In fact, recent studies show that paid YouTube ads are 84% more likely to capture viewer attention than traditional TV ads, which can be far more expensive.

The way people consume media is always changing. Targeting the most viewed platforms with your paid advertisements will ensure better reach and engagement.

Seize the season

It’s an oft-repeated marketing myth that the Coca-Cola company owns the “rights” to Santa Claus. While that is not true, the company did have a hand in creating some of Santa’s most recognizable features for a 1931 marketing campaign. The white beard, the rosy cheeks, and twinkling eyes combined with Coca-Cola’s red and white branding became solidified in the cultural zeitgeist, forever connecting Coca-Cola and Christmas.

Beverage companies are positioned well to seize seasonal marketing opportunities. The dog days of summer go well with a crisp lemonade, while the dead of winter leaves many craving a hot cocoa or hot toddy.

Beverages are a part of gatherings, milestone moments, and seasonal celebrations, no matter the time of year. By connecting emotion with brand recognition, marketers can use seasonal positioning to further their reach.

Brand partnerships

With our hyper-connected world, forging brand partnerships is easier than ever before. Beverage companies have created some famous brand partnerships over time, such as GoPro and Red Bull, or Bonne Bell and Dr. Pepper.

With a brand partnership, a mutually beneficial collaboration is formed. New products can leverage the popularity of the established brand, and the partner company can have something novel to share with its audience. Brand partnerships can also allow a beverage company to create exciting new taste combinations or product ideas.

If you are interested in finding another company for a brand partnership, consider their target audience and brand identity. That potential partner’s goals should match your own to forge a successful collaboration.

Engaging events

When a beverage hits the scene, the creators often host a launch event to introduce the beverage to the market. This marketing strategy is still valid, but beverage creators seeking to disrupt the status quo should put a lot of time and effort into making their event stand out among the competition.

Knowing your audience lets you know who to invite to your event to get your new beverage in front of the right people. The proper venue and the right theme can also help elevate your event from just a simple launch to a night no one will soon forget. However, hosting elaborate launch events can be pricey, so an ROI analysis should be performed before you go all-in on the “event of the century.”

The goal of any marketing campaign is to increase visibility and engagement surrounding your new product. If you aim to disrupt an industry as long-standing and — let’s face it — crowded as the beverage industry, your marketing approach will need to be thoughtful, well-researched, and novel if you wish for it to make the intended impact.

By considering emerging marketing approaches and developing new takes on old marketing standards, a new beverage business with a great product idea can thrive.

Women in the Spirits Industry

PRESERVING HISTORY WHILE CREATING THEIR OWN

By Cheryl Gray

They own distilleries, take charge of day-to-day operations and hold court as master distillers around the globe. We’re talking about women in the spirits industry breaking barriers, making it possible for other women to do the same.

In a largely male-dominated industry, there is an increasing number of women who have earned major roles, from building distilleries to creating the blends that put those distilleries on the map. Those blends are either passed on from generation to generation or come in the form of new taste sensations. All are designed to appeal to an unquenchable consumer demand for innovation and tradition.

Victoria Eady Butler can speak with authority on both subjects.  She is the great-great-granddaughter of Nathan “Nearest” Green, a former slave and first known African American master distiller who taught Jack Daniel—yes, that Jack Daniel—how to make the legendary Tennessee whiskey that bears the JACK DANIEL’S brandname. Daniel would later hire Green to be his master distiller, a historical link between the two men widely acknowledged by Jack Daniel’s parent company, BROWN-FORMAN.

Five generations later, it is Eady Butler’s turn at making history. She is the first African American Master Blender for a major spirits brand, UNCLE NEAREST PREMIUM WHISKEY, named after her great-great grandfather.  Eady Butler’s legacy is the foundation for award-winning bourbons and whiskeys branded by NEAREST GREEN DISTILLERY in Shelbyville, Tennessee. Since its brand launch in 2017 by Founder and CEO Fawn Weaver, the company reports it has generated more than $100 million dollars in sales with products sold in all 50 states and 12 countries around the world.

Eady Butler explains how Weaver brought her on as part of the company’s leadership team, first as Vice President of Administration but soon thereafter, as its Master Blender.

“I had no idea that this was down the road for me. Fawn Weaver, our CEO and Founder, and I talked and she knew that I was considering retirement. Everything unfolded from that conversation. I retired from my previous career and started with Uncle Nearest within a few days. Now that I’m here, I fully get it. Whiskey truly is in my blood. To carry on a legacy that lay dormant for more than 160 years, it’s just unbelievable.” 

Under the discerning palate of Eady Butler, the Uncle Nearest brand has won multiple industry awards while she has won consecutive top honors bestowed upon her by industry peers.

“When our 1884 Small Batch launched in July 2019, the whiskey family took to it immediately and we started winning awards right out of the gate. So, I blended the second batch. The awards and accolades kept coming. Soon thereafter I was elevated to Master Blender and have blended every batch since. Also, when I was named Master Blender of the Year by the American Icons of Whisky Awards, I was the first female to ever earn the title.”

Preserving the heritage surrounding one of Puerto Rico’s most famous exports, rum, is partly what drew Liza Cordero to the spirits industry.  Cordero used her background as a chemical engineer to become Master Blender of the world-renowned DESTILERÍA SERRALLÉS and oversee the distillation process of its DON Q RUM, made in Puerto Rico for more than 150 years.

Born in San Juan, Cordero knew early on that she wanted to be engaged in chemical engineering and was involved in both the petrochemical and biotechnology industries. She says that she found her true passion, though, in working with rums. For more than two decades, Cordera has been directly involved in the fermentation and distillation processes and is responsible for quality control at the landmark distillery.  She describes how taking a chance turned into a rewarding new career.

“The company was recruiting an Assistant Manager for the Distillation and Fermentation Process Area. As soon as I saw this, I did not hesitate to accept the challenge to work for the best distillery in Puerto Rico, which produces the best and most authentic Puerto Rican Rum. In the 21 years that I have been working here, I can truly say that my decision was the right one!”

Cordero describes her role at the distillery.

I am the Rum Distillery Master Blender and work hand-in hand-with the First Maestra Ronera (Master Teacher) Silvia Santiago, who has been with the company for 50 years. I am responsible for developing Don Q products that follow today’s market trends, which can be enjoyed in cocktails and sipping rums, all while honoring Don Q’s origins. These products need to be different from others in the market, which we achieve by carefully selecting blends that will be part of our premium and flavored rums, choosing natural ingredients that will guarantee an outstanding tasting experience. In order for me to achieve what we want for rum aficionados; it is important to understand the differences among the aged rums that we have available. Each one has its own characteristic taste and aroma.”

Cordero’s says her mentors include other women like Santiago who have helped to guide her through the industry.  The advice she gives for other women who want to enter the business is   to the point.

“Throughout my career, I have learned that in order to prove that women can equally execute and be involved in the same tasks and assignments that are performed by men, it’s important to employ your knowledge and experience, to prove your point and to take a position on matters. It is crucial that decisions are made based on something solid that can withstand any questions or critical analysis. They cannot be made based on opinions or personal points of views. It is in this way that women can earn respect, and that we get assigned to key decision teams and positions in organizations.”

Valerie Colella is an award-winning Single Barrel Specialist and National Ambassador for Castle & Key Distillery.  Most recently, Colella was recognized by the Bourbon Women Association as a finalist for the 2023 Brand Ambassador of The Year.

“As Single Barrel Specialist, I help execute our single barrel program along with our very talented team in Frankfort, Kentucky and I also have the pleasure of hosting our VIP industry and trade groups. As National Brand Ambassador, I help support our sales team across 24 markets by creating fun educational and pairing experiences for our partners and consumers.”

Colella relocated to Kentucky after working in West Virginia at Smooth Ambler Distillery.  Collela cites a key mentor who helped her to get her footing in the industry.

“Most of my foundational understanding about what makes a craft distillery tick, I learned in my eight years from Smooth Ambler under Head Distiller, John Little. He demanded a very high level of dedication and execution from all of us. He took great pride in the spirits we were producing in West Virginia and so did we.

Whether it was the retail or consumer facing side of the business, distribution, sensory, analysis, or branding strategy, he gave me so many opportunities to work really hard, learn and grow personally and professionally.”

Collela points to women mentors that include Lisa Wicker, President and Head Distiller for WIDOW JANE of Brooklyn, New York, Sherri Carter, Master Blender and Co-Founder of OLD CARTER WHISKEY COMPANY based in Louisville, Kentucky and Jackie Zykan, former Master Taster for BROWN FORMAN’S OLD FORESTER and creator of the newly launched whiskey, HIDDEN BARN.  Collela says the work these women have accomplished in blending and maturation inspires her.

“When you’re navigating your own professional growth and you’re trying to find your footing or voice in a male-dominated industry, no one understands the challenges that come with being a woman in spirits except the ones that walked through the fire and helped pave that path. From Iron Root Republic, Milam & Greene, Uncle Nearest—so many ridiculously talented female master distillers, blenders and owner-operators are absolutely blazing all kinds of trails. It’s such an exciting time to draw inspiration from.”

The number of women in the spirits industry keeps growing, Collela says, and the industry’s expansion requires new talent.

“That being said, I think we’re going to see a diverse new generation of whiskey makers, and spirit blenders into the next decade. What we see across all aspects of the aged spirits industry, is that there still continues to be an incredible demand for whiskey. There doesn’t seem to be a saturation point. NDP’s & distilleries keep on expanding, and there’s a whiskey for every palate. There’s not just the collector and the enthusiast anymore. Whiskey is becoming a multi- dimensional demographic.”

Eady Butler of Nearest Green says that for women entering the business, tenacity is particularly important.

“The key is to be committed, dedicated, eager to learn, and put everything you hold dear into it. In addition, it’s imperative that you surround yourself with people who are knowledgeable, patient, and in my case, willing to share their experiences and wisdom. The biggest thing is setting aside your fear of failure and just go for it.”   

Barrel Storage Tips for Breweries and Distilleries

stack of barrels in a warehouse

By Alyssa L. Ochs

Breweries and distilleries use barrels for aging, to achieve oxidation and charring and to add distinctive flavors to their products. But an important factor to remember is how you store the barrels because storage can affect flavors, textures and the length of the brewing or distilling process.

To learn more about this issue and how modern producers approach barrel storage, we connected with a few brewers and distillers to discuss common challenges, best practices and expert advice.

Where to Store Barrels

One common place to store barrels is a racked warehouse, also known as a rickhouse or rackhouse. With this method, craft beverage companies typically hold barrels horizontally on racks with room for air to circulate around the sides and ends. Racked warehouse buildings are made from brick, wood, tin or concrete and may be subject to seasonal fluctuations due to a lack of climate control.

Barrels on lower racks have more consistent yearly temperatures, and the racks are usually six to nine barrels high per floor in a multi-story structure. Getting the barrels in and out of the racks can be labor-intensive. So, some producers use single-story or rickhouses up to four stories tall instead for greater ease and more consistent aging.

Another option for beverage producers is palletized warehouses, where employees place barrels on large, wooden pallets, usually four to six barrels per pallet. Employees can store them vertically with pallets on top of each other to save space and labor. Then, they can move multiple barrels on pallets at a time with a forklift, usually six high per floor. Since restricted airflow may alter the aging process, companies may need to install large fans in the area. This method works best in cool and humid climates without extreme temperature changes. However, there is a greater chance of leaks with pallets stacked on top of each other in a palletized warehouse.

Meanwhile, dunnage warehouses are a well-established form of barrel storage tied to old Scottish traditions. A dunnage warehouse is a single-floor warehouse that offers a beautiful display and consistent maturation over many years. This method is commonly used for old and rare whiskies. The warehouse walls are typically made from stone or brick to prevent large temperature swings that could affect the flavors.

The Importance of Barrel Storage

It is helpful to understand the various methods of barrel storage so that your business can improve flavor profiles and add in flavors like oak, vanilla and fruit. Part of the barrel cleaning and maintenance process also involves checking and cleaning the inside and outside of barrels received, checking for leaks, making repairs and using heat or chemicals to treat them before the first fill. For example, staff members can light a sulfur burner inside a barrel to preserve it and ensure no mold growth, but not if the barrel previously aged spirits. You’ll need to close the bunghole quickly, avoid breathing in the toxic sulfur dioxide and then store the barrels in a cool and dry place, checking them occasionally because gas tends to escape within a few months.

Alternatively, producers can use a citric acid solution to protect barrels from microbial growth for six months or longer to keep the barrels moist. Another vital thing to remember is that storage racks and warehouses must be built with noncombustible materials, such as reinforced concrete, masonry or fireproof steel. Also, electrical systems should be at least five feet above the top of the highest storage level for safety purposes.

What Works for Distillers and Brewers

Matt Cunningham, founder and proprietor of Old Glory Distilling Co. in Clarksville, Tennessee, told Beverage Master that his company palletizes all of its barrels. Old Glory Distilling opened in 2016 and specializes in small-batch Tennessee whiskey and bourbon.

“We use four barrel pallets designed specifically for the storage of barrels to be able to stack them six high in columns,” Cunningham said. “We use a system in our warehouse of rows and columns for organization and safety. We have used some racks before where barrels are laid down, but the amount of space those racks took up and the difficulty handling them didn’t make sense when we built our 10,000-barrel barrel house and made plans for a second one.”

Cunningham said that they plan to take a similar approach to their second barrel house. He also said that the most important thing to keep in mind about barrel storage for spirits is ensuring airflow around the barrels and not enclosing them in a space that does not have any airflow.

“As those barrels are breathing, you don’t want them to become stagnant,” Cunningham said. “This is something we found out and paid heed to some people who used storage containers in the past because they were cheap and readily available. While you can store barrels in them, just make sure they are ventilated and not sealed up. If you are going to use those and your jurisdiction allows for it, you need to ensure good air flow.”

Bryan Smith, the master distiller and owner of Hard Truth Distilling Co. in Nashville, Indiana, told Beverage Master that his company also stores barrels in a palletized barrel warehouse. Hard Truth Distilling began distilling spirits in 2015. It produces over 20 premium spirits and quickly outgrew its original production facility. In 2017, Hard Truth moved into its current 50,000-square-foot building with a state-of-the-art Vendome Copper & Brass distilling system. Its wooded, 325-acre destination campus in Brown County, Indiana also serves as an artist colony and tourist destination surrounded by natural beauty.

“Storing the barrels vertically and on pallets makes our ability to pull barrels for sampling and for blends far more efficient and safe,” Smith said. “Safety is the first consideration, followed by environmental conditions favorable to shape the whiskey to the flavor profile. While monitoring temperature and humidity, for us, a one-story barrel warehouse gives us more consistency over time.”

Many breweries around the U.S. also use barrels and must plan ahead for their storage needs. One example is Alpha Michigan Brewing Company, located in the smallest village in America with a brewery: Alpha, Michigan, which had a population of 126 at the time of the 2020 census. Alpha Brewery prioritizes community involvement and brews to support local organizations, hosting fundraisers and sourcing ingredients from local farmers.

Mike Bjork from Alpha Michigan Brewing Company told us, “We store full barrels in our walk-in cooler and empty, clean barrels in the office with limited space.” He said the most important thing to remember about barrel storage is to “keep the clean and dirty barrels separated.”

The Biggest Issue with Barrel Storage

The biggest challenge that Old Glory Distillery has faced with barrel storage relates to space concerns and a lack of storage space.

“When you start off, you have a designated space where you’re going to store your barrels, but next thing you know, it’s full,” Cunningham from Old Glory Distilling said. “Make sure storage is in excess of what you need because it’s going to fill up.”

Space has also been an issue for Hard Truth Distilling in recent years.

“Our biggest challenge has been our rate of expansion and being able to keep up with our storage needs,” Smith from Hard Truth said.

On the brewery side, Bjork from Alpha Michigan Brewery shared with Beverage Master that space has been his brewery’s biggest challenge, as well.

Advice About Barrel Storage

Brewers and distillers may be interested to learn about companies offering barrel storage solutions, such as B.R. Distilling Company, which provides bonded warehouse storage on four-barrel pallets and charges a monthly storage rate, plus handling fees. Some barrel storage specialty companies offer additional services, including lab analysis, logistics, sampling and TIB registrations.

Some interesting trends in barrel storage are happening now, such as distilleries moving away from traditional rickhouses and using palletized storage instead. This approach generally makes it easier for employees to move barrels and check on the aging process. Also, the industry has increased awareness about how metal roofs and thin walls can make flavors change when seasons change. Craft beverage companies may consider storage-saving designs in which a rack can be compressed into a stack when empty. Meanwhile, barrel storage walls at distilleries can serve decorative purposes by providing attractive photo backdrops and conversation pieces for guests.

One major piece of advice for brewers and distillers is always to keep the barrel storage warehouse clean and dry. Our experts provide additional tips and advice to guide new businesses and those amid operational transitions.

Cunningham from Old Glory Distilling shared with Beverage Master that his advice is to “allow for more space than what you initially need because you’ll eventually need it later.” He also advised,” You don’t need a bung in the staves if you are going to palletize them, as it creates a possibility for those barrels to leak.”

From Hard Truth Distilling, Smith advised, “Do plenty of research on safety and regulatory requirements in your area, first and foremost. Take into consideration your planned operational space and ability to be able to access barrels, as well as the time you plan to age and the flavor profile that you were targeting. And finally, make sure to build more capacity than you think you might need.”

Bjork from Alpha Michigan Brewing Company’s advice to breweries is similar and follows a common theme throughout the industry. He simply advises new and growing breweries, “Ensure you have sufficient space for all barrel storage.”

High Performance Counts

Experts Supply Craft Brewers and Distillers with Pumps That Set Products in Motion

two men working on pumps outside of a distillery tank

By: Cheryl Gray

Choosing pumps for breweries and distilleries requires consideration of several factors, perhaps none more important than technology. That technology is what propels the liquids that create a successful product for the beer and spirits industries.

When it comes to the ever-changing line-up of products, advanced pump technology is taking the lead in which products find their way into brewery and distillery production lines.

Ampco Pumps Company is one of the manufacturers providing state-of-the-art technology in its pump products. An ISO 9001:2015 Registered Company, Ampco is a spin-off from the original firm, founded in 1914 and headquartered in suburban Milwaukee, Wisconsin, where it manufactures products. Ampco has regional offices throughout the United States and also an international sales, assembly and light fabrication plant in Germany. Additionally, as part of The Krones Group, Ampco Pumps Company has leveraged its position as a member of a global team serving the food and beverage industries.

Ampco Pumps Company has been providing quality centrifugal pumps and positive displacement pumps worldwide for more than 70 years. It is committed to manufacturing quality products, providing excellent customer service and competitive pricing to its customers. It has become the preferred pump provider for some of the most recognized companies across the globe.

For breweries, Ampco says it focuses on maximizing efficiency and portability by engineering pumps that have been incorporated into Ampco carts. The company explains how its carts are tailored to each customer’s specifications and can accommodate any Ampco centrifugal pump, positive displacement pump or blender. It also boasts a wide variety of products to meet the challenges of small and mid-sized craft breweries.

Bob Garner is the engineering manager for Ampco. With more than 30 years of engineering experience with C Series and centrifugal pumps, Garner is very familiar with the challenges that craft breweries face.

“Ampco was hearing from craft brewers about a common leaky pump issue when pumping hot wort,” he said. “They were all using a standard C Series, and it did not matter the brand of pump. So, I looked into the issue closely to find a solution. The result was the development of the CB+ Craft Brew pump, which solved the problem.”

Garner describes why Ampco’s CB+ is so popular among its craft brewery clients.

“It was designed to solve a problem that no one else in the industry was working on,” he said. “The CB+ solution reduces lost product, is easy to maintain and has proven to have longer seal life than a standard C Series, which saves money in the long run. There are also conversion kits available to convert standard C Series to the CB+. The response from customers has been overwhelmingly positive.”

Ampco touts its high priority on pre- and post-sale customer service for its clients. Garner adds that the company’s reputation in this area plays an important role in its growth.

“Providing superior customer service is part of our mission,” he said. “Quick response times from knowledgeable representatives and trained engineers in real time is part of the advantage of working with Ampco. It has been an important part of what put us on the map and how we continue to grow.”

Many of Ampco’s products can be customized to ensure accuracy when it comes to mixing and blending applications. One of those products is the ZPI Positive Displacement Pump. While the product is manufactured to meet the needs of wineries, the company touts it as tough enough for the demands of breweries, including spent yeast with hop material. The ZPI can also handle product handling for harvesting yeast, propagation skids, feeding a centrifuge and cone-to-cone transfer.

FLUX Pumps is another industry leader. FLUX Pumps made its mark when the first electric pump was introduced to the marketplace in 1950, and the name bore the moniker FLUX. Soon after, the company launched the first explosion-proof drum pump for use in hazardous areas. In the decades since, FLUX Pumps has paved the way as one of the frontrunners in drum and container pumping technology.

The company has its headquarters and manufacturing plant in Germany. It has global ties that include six subsidiaries and a comprehensive roster of distribution centers that give FLUX the ability to service clients in more than 100 countries. FLUX Pumps also operates corporate offices in the United States, Belgium, India, Thailand, the United Kingdom and France.

Glenn Mulligan is the president of FLUX Pumps North America. He explains how pump performance helps keep production lines running efficiently. He says his product advice is the same for all craft breweries. Product longevity and performance play important roles because the duo increases productivity by shifting tasks that used to be done by hand to automation.

Recent product releases by FLUX Pumps include the VISCOPOWER product line. These pumps phased out the company’s F550 and F560 pump models.

The newer design was created for easier assembly and dismantling, a change that reduces cleaning and maintenance while simplifying the pump design. VISCOPOWER pumps are designed with a modular configuration that allows for streamlined spare parts, while at the same time, offering a customizable pump design.

FLUX Pumps also offers flow meters and control panels, which can turn a standard drum or tote pump into a one-touch batching/metering system. This technology eliminates the guesswork of dispensing the right amount of product. As Mulligan explains, adding just a few components to a pump can help FLUX Pumps customers come away with an accurate, repeatable dosing product that saves clients time and money by reducing costly mistakes. 

Distillers have some of the same challenges as brewers when it comes to choosing the right pumps to get the job done. Todd Thrasher is the founder and owner of Potomac Distilling Company, located in Washington, D.C.’s waterfront District Wharf. In business since 2018, the industrial distillery is the headquarters for Thrasher’s signature Thrasher’s Rum, which is sold in island-inspired flavor profiles, such as white, spiced, coconut, green spiced and gold.

Thrasher knows a thing or two about what pumps and accessories he needs to create his products, while at the same time ensuring a work environment that is both safe and productive.   For transferring high-proof spirits, Thrasher’s Potomac Distilling Company prefers the SimpleSpirits 49 Air Diaphragm Ethanol Transfer Pump.

“I purchased this pump first because I knew it would handle high ethanol spirits,” he said. “It has been a great piece of equipment in the distillery. I made this specific selection upon research and other industry recommendations.”

The pump is manufactured by Versamatic, headquartered in Mansfield, Ohio. One of Versamatic’s key suppliers is TCW Equipment, which is in California’s Sonoma Valley. In business since 1966, TCW Equipment is a supplier to multiple areas of the beverage industry, including breweries and distilleries.

The SimpleSpirits 49 pumps are ATEX-rated, which means that, when used as instructed, they comply with all safety regulations that govern atmosphere explosive devices. The pumps are equipped with EPDM diaphragms, which are durable and compatible with ethyl alcohol. In addition, the pumps run entirely on compressed air, therefore reducing the threat of static discharge from electrical equipment that could cause fires when encountering flammable vapors. Finally, the pumps can be connected to a ground source in the distillery, ensuring that any naturally occurring static build-up is discharged into the ground.

For low-proof spirits, Thrasher looks to McFinn Technologies out of Kenosha, Wisconsin for its 22060, a self-priming, multiple-speed and reversible-flow direction pump with a standard wireless remote control. 

“This pump was purchased shortly after Potomac Distilling Company opened as I realized that another pump was needed – this is made to move wash that isn’t overproof,” he said. “And it gets used before spirit runs to move the fermentations over to the still.”

The pump’s three-horsepower version features a 1750 TEFC motor and NEMA 4 VFD with a standard stainless-steel cart. This model also features voltage options. Additional pump models by McFinn Technologies include the 20035, 20035CC and the 30080.

There are multiple choices for distilleries and breweries when it comes to choosing pump products and accessories. The decision-making comes down to price, productivity and safety protection in the workspace. Expert companies with years of engineering and scientific knowledge can help. Combining that knowledge with years of experience working with clients in the production of spirits and beer can go a long way toward helping breweries and distilleries make the right moves to move their products to the market.

Flavored Malt Beverages: Origins and Applicable Federal Regulations

6 bottles of different beers lined up on a table

By: Brad Berkman and Louis Terminello, Greenspoon Marder

There is a strange concoction that lurks within the bowels of the brewer’s tank. It is formed with malt, but is not beer, it is something other whose mere mention may frighten beer aficionados to the essence of their being. This mysterious liquid soon slithers through tubes and to the bottling line where 12oz bottles are filled with this ethereal liquid. The bottles make their way to the grocery shelf where it is soon removed from its cold box perch to the refrigerators of eager consumers. There the potion rests until its top is popped and it’s brought to the lips of the drinker. A first sip and this bottled creature metamorphizes to a glorious nectar, causing a love affair that is reflected in astounding Nielsen numbers. To the disappointment of any beer geeks, the flavored malt beverage or FMB is a darling of the brewing industry, not for its purist nature but for the sound of jingling coin that comes from the brewer’s pocketbook after each batch is made and sold and drank and asked for more of. The FMB is a clear consumer favorite.

  The FMB as a category, has an Alcohol and Tobacco Tax and Trade Bureau (TTB), codified definition. Before we get there, however, the reader should be aware that the style of drink isn’t a new phenomenon. The drink made its way first on to the shelves of certain European countries in the late 1990’s, among other places, and caused quite a bit of controversy for its generally sweet flavor profile, small bottle size, and perceived target audience.

Of course, it bears refreshing the memory that these drinks were and are offered as beer alternatives. They are meant to be, in most iterations, a light, flavorful alternative to traditional beers. Initially, they were referred to as alcopops, and now are more commonly called Ready-to Drinks or RTD’s (there are many drinks formulas that fall into the RTD category, including spirits based and non-malt based (see hard seltzer), but certainly FMB’s are a leader in that general category. Another publication reports that beer RTD’s “make up the vast majority of overall RTD’s sales with 42.7% of RTD dollar sales coming from FMB’s.  

  Some early precursors to contemporary FMB’s, the reader may recall, were Smirnoff Ice, WKD and Hoopers Hooch. In fact, this writer recalls from his prior career in “the industry”, travelling to the UK and witnessing the small cold-boxes stationed below virtually every back bar and thinking that the English will drink anything and wondering how long it will take before these drinks make their way across the Atlantic to the shores of the United Sates. Woe is me, if I only had bought stock.

  Well, the answer to the above question is, arguably 1993 with the introduction of Zima by the Coors Brewing Company. Buffs of the history of the drink will clearly remember Zima, (and the pun is intended), as the first clear, citrus-like malt-based beverage to make its way onto the beer shelf. Offered as a light alternative to beer, it had a modicum of success at introduction, but its popularity faded quickly (it was in fact re-introduced in 2017 but sales quickly sputtered out).

  The origins of RTD’s likely stemmed from restrictions on the activities permitted on the brewing premises by federal law. Creative brewers looked to unique formulations using permitted brewers’ ingredients only. A driving force behind limiting ingredients and production processes at a brewery is to ensure that tax revenue generation is not jeopardized. As the reader likely knows, malt is taxed at a different rate than wine which is taxed at a different rate than spirits and never shall the thrice be combined.  I point the reader to the following section of the Internal Revenue Code (the IRC):

26 USC 5411:

  The brewery shall be used under regulations prescribed… for the purpose of producing, packaging, and storing beer, cereal beverages containing less than one-half of 1 percent of alcohol by volume, vitamins, ice, malt, malt sirup, and other byproducts and of soft drinks; for the purpose of processing spent grain, carbon dioxide, and yeast… and for such other purposes as the Secretary by regulation may find will not jeopardize the revenue.

  As we see from the above the purpose of the brewery premises is limited to the production of beer and storing certain brewing materials. Also, the code section below has arguably a more profound limiting effect on the materials permitted on the premises. But here, I caution the reader to pay careful attention to subpart (b) of the following and different code section. It is here that lays the codified origin of the FMB.

 § 25.15 Materials for the Production of Beer

(a) Beer must be brewed from malt or from substitutes for malt. Only rice, grain of any kind, bran, glucose, sugar, and molasses are substitutes for malt. In addition, you may also use the following materials as adjuncts in fermenting beer: honey, fruit, fruit juice, fruit concentrate, herbs, spices, and other food materials.

(b) You may use flavors and other nonbeverage ingredients containing alcohol in producing beer. Flavors and other nonbeverage ingredients containing alcohol may contribute no more than 49% of the overall alcohol content of the finished beer. For example, a finished beer that contains 5.0% alcohol by volume must derive a minimum of 2.55% alcohol by volume from the fermentation of ingredients at the brewery and may derive not more than 2.45% alcohol by volume from the addition of flavors and other nonbeverage ingredients containing alcohol. In the case of beer with an alcohol content of more than 6% by volume, no more than 1.5% of the volume of the beer may consist of alcohol derived from added flavors and other nonbeverage ingredients containing alcohol.

  The above code section limited the amount of alcohol from flavors and nonbeverage ingredients containing alcohol to 49% but that didn’t stop brewers and drinks makers from creating unique products with malt base and taxed at the beer rate, making for a competitively priced product on the beer shelf. In fact, TTB permits the use of mixed cocktail names such as Margarita or Moscow Mule on malt-based products that resemble these cocktails. Many brewers have done a fine job of emulating these mixed drinks flavors under the FMB rubric. Of course, that hasn’t stopped consumers from bringing civil actions against producers arguing that these drinks have been mislabeled and are untruthful but that is a topic for another days.

  I’m sure it’s obvious to the reader that the hard seltzer craze finds its origins in the FMB category, many of which, but not all are malt based. The bottom line here is that this category of malt beverage finds its roots in three factors; consumer demand for variety of taste profiles, the brewer’s ability to create these brews within the confines of government tax revenue regulations and using ingredients that do not jeopardize revenue collection w maintaining the desired shelf price. This writer for one looks forward to watching how consumer demand for unique flavors pushes brewers to come up with creative FMB formulas which surely will lead to greater excitement in the category.

How Bars & Restaurants Can Protect Themselves Amid Heightened Violence

photo of man in bar holding down another man on a table getting ready to punch that man and a women is trying to stop that man from punching

By: David DeLorenzo

Rising violence is an unfortunate reality around the world. It’s happening close to home, too. Bar and restaurant owners are experiencing incidences involving weapons or shootings in and around their establishments on a more regular basis. This is a sad situation and a dangerous one. Bar and restaurant owners need to know what to do in the aftermath of a weapons incident. Even more importantly, they need to know how to protect themselves and help prevent incidences from happening in the first place.

  Unfortunately, many people don’t realize that it’s becoming more common for firearms exclusions to be included in insurance policies. These prevent an insurance company from having to pay out any monetary compensation to not only the insured but also victims of an incident. That means beyond any monetary compensation, these exclusions ensure the insurance company would also not have to cover other items such as risk assessment, business income lost if the establishment had to temporarily close or was hit with a lawsuit or post-counseling services for those involved. Just one incident could put a bar or restaurant right out of business. It’s important that they are aware of what their policies do and do not cover — and to protect themselves from scenarios like this.

  In the current state of the industry, and at any time, being informed is essential. Bar and restaurant owners should check their policies to see if weapons are excluded from their commercial general liability coverage. If these exclusions exist in their current policies, bar and restaurant owners should add stand-alone coverage to their policies (or purchase them separately). These will protect them in the case of active shooter and deadly weapons incidents.

  As with being educated, being proactive in preventing an incident is key. Bar and restaurant owners need to protect their businesses, their livelihoods, their staff and their patrons. That’s a heavy responsibility — one that should not be taken lightly, especially amid heightened violence situations. There are a few steps owners can take.

  First, simply posting “no weapons” signs at the entries of the establishment, on the building and around the premises (such in the parking lot) can help. If the bar or restaurant owner suspects a violent incident could occur or has noticed aggressive behavior, they could heighten security measures by hiring a door person as well as additional security personnel, preferably those who have previous law enforcement or nightclub experience.

  Proper staff training is another factor that can help bar and restaurant owners in the case of an incident (or hopefully in the instance of preventing one). It’s important for employees to receive on-going training for security as well as preventing overserving that could lead to aggressive behavior, a fight or a shooting. Servers should know how to spot an “obviously intoxicated” person and understand the establishment’s policies on how to address refusing to serve or no longer serving alcohol to an obviously intoxicated person.

  The California Department of Alcoholic Beverage Control notes: “The law states that no person may sell or give alcohol to anyone who is obviously intoxicated. Therefore, every person who sells, furnishes, gives, or causes to be sold, furnished, or given any alcoholic beverage to any OBVIOUSLY intoxicated person is guilty of a misdemeanor. A person is obviously intoxicated when the average person can plainly see that the person is intoxicated. In other words, the person looks or acts drunk.”

  Because weapons incidences are often a result of too much alcohol, staff should be trained on how to spot the signs of intoxication so they feel confident in assessing whether or not they should serve that patron. Restaurants can actually be slapped with a lawsuit if a fight breaks out on their premise. In today’s world where people become easily triggered and too much alcohol, a recipe for an incident is brewing.

  Ideally, an intoxicated person (or a person carrying a weapon) shouldn’t make it past door security — another reason to create a position for that very important role if the restaurant doesn’t already. If a staff member notices that a person is becoming intoxicated, they need to halt their alcohol service immediately.

  In addition to door security, security cameras are an excellent resource to help protect bar and restaurant owners in the case of a weapons incident. Good quality security video footage with timestamps can help catch the details of an incident, limit liability and hopefully absolve the bar or restaurant of any fault in the case of a weapons or shooting incident at their establishment.

  Keeping weapons out of the establishment is crucial, but oftentimes these acts of violence are happening around the establishments or in their parking lots, not actually inside. This is where the addition of cameras and security around the perimeters and in their parking lots can also prove helpful.

  Weapons exclusions are becoming mainstay on policies with carriers not wanting to cover violent acts with a weapon that happen on the premises of bars, restaurants and other businesses in the hospitality industry. However, with these types of instances on the rise, businesses need to ensure they are protected — as well as their employees and their patrons.

  In addition to weapons exclusions becoming more common, assault and battery exclusions as well as sub-limits on policies stating carriers don’t want as much liability on violent acts between partners and or employees are becoming more frequent. Liquor liabilities are also an issue. Liquor liability sub-limits no longer cover the full limit of an establishment’s lease.

  I was recently part of a team that worked to change the law when it comes to establishments that serve alcohol in Arizona. While it’s legal to serve alcohol to adults, establishments can literally get a claim filed on their record and get a letter from an attorney if they so much as think a person stepped foot onto their premises and had a sip of one drink. 

  The burden has been for the establishment and their insurance carrier to prove that they didn’t do something negligent. The problem with this is a combination of many things — one of them being that wording of “obviously intoxicated” mentioned earlier. This phrase has taken on whatever meaning it needs to in order for whatever party suing the establishment to make their case.

  Together with some very influential people in the Arizona hospitality along with the Arizona Licensed Beverage Association (ALBA), which was a major player in this effort, an Amicus Curiae brief was formed. With this decision by the Supreme Court being held, there should be some changes to the way establishments are sued and how insurance companies underwrite risks. This is new to everyone involved and it will take some time to see changes occur, but overall this is a win for the Arizona hospitality industry.

  Finally, it’s important that bar and restaurant owners stay in communication with their insurance agents and up to date on any changing policies. Spending some time ensuring an establishment is properly covered provides safety and peace of mind for all.

  Out of his passion to serve the restaurant and hospitality industry, David DeLorenzo created the Bar and Restaurant Insurance niche division of his father’s company The Ambassador Group, which he purchased in 2009. For more than 20 years, he has been dedicated to helping protect and connect the hospitality industry in Arizona.

For more visit: barandrestaurantinsurance.com

Technical Break Down for Single Malt Whiskey Production

Photo of whiskey decanter half filled with whisky with 2 whiskey glasses partially filled with whiskey on a table

By: Kris Bohm of Distillery Now Consulting

Single Malt whiskey is a lively distilled spirit that is produced in countries all around the world. There are many ways to make single malt, and in this two-part article we discuss, in depth, just one of those ways. Distillers have very creative processes, and this is the reason that when you taste whiskey at different distilleries, they rarely taste the same.  In this two-part article we will go through the start to finish process of making malt whiskey and break down the classic method of the production of single malt whiskey.

  Single malt whiskey production was first developed and refined in Scotland over several hundred years and the results of that production method produced some of the finest single malt Whiskey in the world. We will now break down step-by-step this method to better understand the processes that were developed by distillers who came before us.   First, let us define American single malt whiskey as it does have legal definitions and requirements on how this whiskey can be made.

  American single malt is made from 100% malted barley. This precludes malt whiskey from being made with corn, rye, wheat, or any raw barley that has not been malted. The malted grain contributes considerably to the overall character and flavor of the spirit and is what differentiates this whiskey from American bourbon or rye whiskey.

  The second aspect of American single malt whiskey that differentiates it from American whiskey is that single malt can be aged in used barrels or new barrels. Used barrels contribute far less flavor and character to a spirit than new American oak barrels do, such as those used for bourbon production. Single malt whiskey is required to be distilled entirely at one distillery.

  Now that we have defined single malt, let us break down the steps of how single malt whiskey is made and how they emulate the methods used for its production in Scotland.

  The specific types of equipment that are used in the production of single malt play a strong role in the flavors that exist in malt whiskey. A mill is used to crack the malted barley into smaller pieces to aid in sugar extraction and this is typically done by a roller mill. While most whiskey mashing uses a cooker to process the grain in malt whiskey production a lauter tun is used instead of a cooker. The lauter allows for separation of the malted barley from the liquid that the grain is steeped in. The product produced by a lauter is a clean fermentable liquid that is free of grains known as wort. The wort is transferred from the lauter through a pump and through a heat exchanger.  This transfer removes all the wort from the lauter and cools it off in the process then further pumps the wort to a fermenter. There are multiple diverse types of fermenters that can be found in distilleries from open top to closed, stainless, wood and everything in between. The most critical part of a fermenter is that it is sized appropriately to hold all the wort that is produced from the lauter.  The fermenter serves to hold the wort while the yeast ferments it and converts the sugar into alcohol to produce a beer suitable for distilling.

  It is important to point out details about the lauter before we move on to the nuances of production methods. Use of a lauter is essential as opposed to a cooker in malt whiskey production. When a malt whiskey is produced in the grain on method such as how bourbon is produced, the tannins in the barley husk will negatively impact the flavor of the whiskey.

  First is the process of the production of single malt from a bag of malted barley to a distiller’s beer ready for distillation. This recipe example has the potential to produce a single full-size barrel of whiskey. (See Recipe Breakdown chart above)

  Now, we will go over the details on how this process is completed in a single vessel lauter tun. It is important to stress that these quantities and numbers are wholly dependent on the specific equipment being used. It will take testing and trials to determine optimal water quantity, temperatures, and minerals to optimize operation of the equipment. It is best to assess and confirm the operation of equipment and holding temperatures prior to your first mash. If everything is fully assessed before mashing, you should be able to have a successful first mash to make single malt whiskey. It is extremely helpful to develop written operating procedures on your mashing process to create replicable results for every single mash.

Malt Whiskey Mash Operating Procedures

•    Mill in grain per mash bill, Check quality of grind to insure proper crack

•    Add 50 gal of 160-degree water to lauter tun cover false bottom plus minerals for Ph adjustment

•    Turn rakes on and add grain to lauter with 300 gallons of water through hydrator

•    Once fully grained, check temperature of mash and adjust as needed. Target temperature is 150

•    Turn rakes off and let mash rest for 30 minutes

•    Slowly start run-off of wort into grant, but do not rush this process or the mash may get stuck

•    Run-off wort till grant clears, then reconfigure manifold to run off wort to kettle

•    Confirm cooling is functional on heat exchanger

•    Start run-off of wort from lauter tun through heat ex and to fermenter

•    When 50% of wort is run off start sparging with 165-degree water

•    Continue to run of wort slowly till lauter tun is empty of wort or fermentor is full

•    Aerate wort prior to pitching yeast and check plato or brix now

•    Pitch 500 grams Yeast into each fermentor per manufacturer’s instructions

•    Set temperature controllers on fermentor to maintain temperature

•    Check plato daily till ferment is complete, (should take 3-5 days)

  When the distiller’s beer has completed fermentation, then it is ready to be distilled.

  There are more steps involved in the distillation process we must complete before we reach a delicious dram of whiskey. In the second part of our article we will cover the process of distillation and maturation methods of malt whiskey in depth as we finish taking this distillers beer and turning it into whiskey. Single Malt whiskey is a fast-growing category of spirits in North America and has ample space for your distillery to contribute to. If you are considering making single malt whiskey, now is the time to do it.