Exploring the Intersection of Beer and Whiskey

By: Becky Garrison

As James Saxon of London based Compass Box observes, historically, distilleries often grew out of breweries or operated alongside them with the union of beer and whisky rooted in process. “Until the 1950s and 1960s, many distilleries would even use yeast cultured and maintained within breweries to ferment their wort. We are starting to see more distilleries re-introduce brewers’ yeast for the flavor impact it can have.”

  Also, Saxon finds the role of the malt recipe or ‘mash bill’ for brewers to be fascinating. “I see the balancing of pale, crystal and chocolate malts to drive flavor and mouthfeel in beer as related to how we introduce different degrees of toasting and charring to the casks we use for whisky maturation.” In his estimation, both drinks benefit from the blender’s ethos. “When enjoyed together, you can experience the skillful layering of texture and flavor in new ways, discovering hidden qualities in the beer and surprising flavors in the whisky.”

  StormBreaker Brewing, a Portland, Oregon based brewpub known for offering whiskey beer pairings, launched Brewstillery in 2014 as a way of showcasing the range of beer and spirit pairings possible among Pacific Northwest brewers and distillers. Traditionally, this festival WAS held in February to commemorate the month when StormBreaker launched. This event featured 20 brewers and distillers paired together along live music and special food offerings with proceeds going to support the local charity Dollar for Portland. (While the festival was on hold due to Covid, StormBreaker hopes to launch the festival again in 2022.)

  When Sebastian Dejens, owner, Stone Barn Brandyworks in Portland, OR was invited to the first Brewstillery, he found this event represented a wonderful opportunity to pair up with some brewers for some creativity and discovery.  Three years into this festival, he told StormBreaker founders

Dan Malech and Rob Lutz that he would buy mash from them if they came up with a window of opportunity.

  For a few days the entire brewing capacity focused on producing roughly 150 gallons of beer. Dejens picked up this beer using a 275-gallon tote placed on the back of his truck that he filled from the tank.  Malech describes their brewing process for this particular beer. “We took our Red and bumped up the grain bill and the kettle hop additions for an intense hoppiness, complemented by a spicy dryness from the rye, but balanced nicely by malty caramel flavors. After fermentation we got hop crazy and dry hopped this beer with 3 lbs/bbl for an explosion of tropical fruit and a citrus nose.” Malech and Lutz named this beer “Good Not Great” (ABV: 8% IBU: 76) which went on to receive a gold medal in the 2020 World Beer Cup Awards in the Imperial Red Ale category.

  In 2020, Dejens released his first whiskey made from this beer. The name of this 92-proof whiskey Barnstormer is a mashup of the names Stone Barn and StormBreaker, with the whimsical label produced by StormBreaker’s label designer. This whiskey had a malty brown sugar sweetness with a nutty finish. Since this initial venture, Dejens continued to collaborate with StormBreaker each year on producing a barrel of whiskey using StormBreaker’s beer. In 2020, Dejens made two barrels as Stormbreaker had increased their barrel capacity. “There needs to be an element of space in the process. You’re making this for three to five years down the road, and you’re just hoping it’s all going to turn out,” Dejens reflected.

  Joshua M. Bernstein, a Brooklyn-based beer, spirits, food and travel journalist, parses the similarity between beer and whiskey from a production standpoint. “Beer and whiskey share a common starting point: grains are simmered to make a sugar-rich broth on which yeast feast, creating alcohol. Typically, a major difference is that distilleries are usually concerned with getting the most sugars (read: potential alcohol) from their grains, then letting the barrels contribute the lion’s share of flavor and aroma. Contrasting that, breweries use a full suite of grains, even darker-roasted ones that contribute fewer fermentable sugars. But now we’re seeing distilleries such as Westland Distilling in Seattle, WA take a craft brewer’s approach to grain selection, building big flavors with any and all grains before the distillates touch wood.”

Craft Brewers Turned

Single Malt Whiskey Distillers

  When Jason Parker, former head brewer with the Seattle based Pike Brewing Company, decided to co-found Copperworks Distilling with Micah Nutt, they knew they couldn’t compete with those established distilleries known for distilling spirits via traditional methods. Their process resulted in products with consistent flavor profiles that have been recognized by consumers for hundreds of years.

  So, they wondered what would happen if they were to distill high-quality beer. “We left the hops out of the beer to keep out the bitterness, and then distilled the beer into vodka, gin, and whiskey,” Parker noted.

  Positive customer feedback led Parker and Nutt to conclude they could produce quality spirits without following traditional distilling techniques. For example, brewers turned distillers such as Parker and Christian Krogstad, founder of House Spirits Distillery in Portland, Oregon, use yeasts and grains that are utilized by many craft brewers but not found in spirits produced by traditional distillers.

  Also, Copperworks is one of the few distilleries that produces a sanitary fermentation—the way breweries do—by boiling their wash for an hour. This process drives off some of the water thereby concentrating the sugar content and sanitizes the wash. When fermented with brewer’s yeast, this produces clean fruity and floral flavors, rather than the sour flavors produced by traditional methods. “All brewers know that boiling their wash kills bacteria and wild yeasts and results in a beer that tastes better and lasts longer. But if you do this for a distilled spirit, it results in new flavors and aromas, unlike the tastes of traditional spirits.” In addition, they leave unfermented sugars in their fermenters, which when distilled and barreled, produces a sense of sweetness in their spirits that’s more commonly associated with craft beers.

Beer and Whiskey Pairings  

  In Parker’s estimation, hops can be so dominant in beer that one cannot discern the beer’s base malt flavor. Hence, his preference when pairing whiskey and beer is to drink a beer low enough in hops so that he can taste the malt. “If I’m lucky enough, I can drink the beer followed by the whiskey being made from this beer,” he states. In particular, Parker loves beer cocktails such as those made at the Seattle based Pike Brewing Company’s seafood restaurant Tankard & Tun which features cocktails made with Pike Brewing’s beer and Copperworks spirits. Beer can provide the sparkling effervescence in cocktails normally obtained via Prosecco or carbonated water along with some sweetness and spice (hops). Parker notes that these cocktails aren’t often on most cocktail menus as this isn’t a skill set practiced by most bartenders. “The challenge is to use a small enough amount of beer to turn it into an effervescent cocktail without having it become a boozy beer,” he opines.

  Saxon is always inclined to start with pale ales and IPAs for their whiskies. “Many of our products have a creamy character thanks to American oak maturation and this mellows the hoppy bite of the beer. Equally, the citrus and tropical flavors of these brews can pull out the subtle fruit notes concealed within the whiskies we use.” Among their favorite pairings included The Spice Tree with a brown ale from the Kernel Brewery, based – like us – in London that was malty, toffee-sweet and richly nutty all at once. So flavorsome and just deliciously pleasurable. “Definitely a boilermaker for the autumn,” Saxon mused. 

  Wanderback (Hood River, OR) chief whiskey maker, Phil Downer prefer their malt forward whiskey paired with a brown ale, porter, or stout. “The malted barley we use for our whiskey are similar to the malts used to make these beers, so they are an easy pairing.  I should generally pair a lighter beer like a pilsner or lager with a lighter whiskey, like a Crown Royal Rye or lighter bourbon.” A purist Downer prefers to sample beer and whiskey separately. “I like them usually on their own to appreciate all the fun things going on in each.”

Trends in Distillery Building and Design:

Operational Efficiency With Pleasing Aesthetics

By: Gerald Dlubala

Successful distillery designs serve the distiller’s needs while also projecting the brand’s intended personality and image. However, getting to that point can make even the most organized person a little overwhelmed. The key to realizing that goal is working with experienced builders, engineers and architects who ask the right questions and guide you through the process, considering your current and future needs.

“It’s about your dreams and visions for sure,” said Dan Nyberg, sales trainer for Morton Buildings. “But it’s also about your budget constraints. That’s where experience in distillery planning, design and building comes in – to build a place that delivers the feel and image you want. There are quality options out there. Do you want the popular barn-type setting? Anything except a barn-type setting? Older and rustic? Modern and contemporary? Pitched roofs are popular simply because the distilling columns are tall and need that height. Sometimes they’re taller than the original facility design. In those cases, rather than coming back down on the opposite side, we continue the roof’s pitch upwards, creating a higher-pitched side to fit the equipment. This design keeps aesthetic balance while keeping in mind future equipment or expansion needs.”

The pandemic demonstrated the usefulness of versatile spaces, creating an increased demand for those that flow seamlessly between indoors and outdoors and offer customization if needed. For distilleries, this translates into designs with multi-use porches and patios that naturally transition between indoors and outdoors to increase space when required.

“The challenges here, of course, are the primary budget constraints and location-specific code restrictions that tell you if something can or can’t be done in the manner you want,” said Nyberg. “But something like the full glass overhead doors that raise and transform a separated venue into one large indoor/outdoor setting are popular amenities that allow the accommodation of different sized crowds for different events. Whether we’re still talking about Covid, changing weather situations or just the ability to appeal to the folks that want to feel like they’re outside without sitting in scorching hot weather, every bit of space must be functional and versatile.”

Earth-friendly Materials, Sustainability & Solar energy

More than ever, craft producers are incorporating sustainability and earth-friendly habits into their production process. That type of conscientious thinking goes into building design, too, especially if it’s part of a distiller’s image. For example, Morton Buildings uses wooden columns, framing and trusses that provide a 100-foot span of clear space width within the building design. Their hybrid design features wood columns, structures and walls that attach to steel trusses, increasing a building’s clear width span up to 150-feet for an even more significant amount of floor plan flexibility.

“Wood is the ultimate renewable resource and a great insulator,” said Nyberg. “One inch of softwood provides an R-value of 1.25 insulation. Blast furnace manufactured steel uses 80-90% recycled steel content. We offer our one-piece energy performer insulation to fill and eliminate cold spaces. Combine all of these elements, and you have a distillery design with a true identity of building sustainably.”

Solar energy is growing in popularity, but mostly in incentive-based areas. Nyberg told Beverage Master Magazine that incentives allow the builder to recover the higher initial installation costs more quickly. It can be a lengthy recovery period otherwise. If solar energy is in the plans, the builder has to be made aware of it well ahead of construction during the initial design process.

“There is the obvious increased weight issue that has to be considered and addressed upfront,” said Nyberg. “It gets factored in with the other installed weight-bearing items that affect the load on the roof structure, like lighting and the type of sprinkler/fire systems used. It may even change your building’s overall orientation by looking at an east/west run with the pitch slope towards the south to get the maximum benefit from the sunlight.”

“Wastewater concerns are another location-specific code requirement,” said Nyberg. “Water runoff should always leave the property at the same rate it would if the new building and lots were not there. Detention pools are a common solution for this problem, and although there are different levels of codes, requirements and enforcement on this issue, we encourage businesses to conscientiously decide to be good neighbors and plan for it by adding it to their design. You don’t want to be the reason that others suffer because of the increased water flow due to your construction.”

How Big Can You Go?

Distillers need to be diligent about expected growth and build a distillery welcoming to future additions, including retail, restaurant and production areas. Otherwise, the potential for expensive mistakes multiplies.

“A distiller has to be realistic in the operations area of distilling along with the brand image that they want to project,” said Nyberg. “You never want to get into a project only to discover a high-priced issue that requires additional resources from your lender. You absolutely need an accessible receiving area, big enough to handle your needs, yet somewhat hidden from your distillery’s other, more public spaces. You need to know what equipment you will be using, including the square footage and height requirements. Retail space is nice to have but nicer if it’s separated from any restaurant or bar area. Even though the customers are buying your products, you don’t want them wandering through the bar or dining area to do so.”

“And now, most distillers – and customers –prefer that visually appealing connection between the production areas and customer use areas. And why wouldn’t you? It’s all pretty cool equipment, and customers want to see the copper, brass and stainless involved in the columns, stills and valve mechanisms. We know that they’ll be spending money while they admire all of this great equipment, but again, you have to defer to local codes for the design. You’ll likely need a fire-rated wall between the two areas, and probably an explosion-proof one at that. Add in large glass viewing areas, and you have a situation that must be well designed and planned to code.”

Seek Out Experience and Plan for Success

Nyberg said that first and foremost, it’s essential to work with a qualified, experienced distillery builder that fulfills your vision and offers a range of options. Then you contact your local permit authority for the specific steps needed to proceed and the correct path for the building team to take. For example, will subcontractors be allowed to formulate their plans and designs, or are you building in a highly permitted area where the entire project is documented and signed off on by a single qualified lead-engineer before any construction occurs? It varies in different regions, and you and the builder need to know.

“Some of the best advice I can give to potential distillery builders, and I’ve seen a lot of them, is to always plan for the best possible outcome of your business,” said Nyberg. “Plan for expansions in production, retail and even dining areas, and then design your space accordingly. Will you want to offer space for future events like private tastings, business or club meetings, weddings or anniversaries? Sketch these areas into your initial design, including all the necessary utilities, even if you’re not building those areas right now. There is nothing worse than trying to piece together expansions while keeping operations running. If the original plans include sketches of these areas, your building will be ready to accommodate the additions with the least amount of disruption possible. Patrons will be excited to see expansion happen in an organized way that allows them to witness the improvements while keeping your normal operations humming along at the same time. They’ll come back to see the progress, anticipate the opening dates, and think about what the changes mean for them as a customer. They’ll share your enthusiasm over the expansion rather than your frustration over trying to negotiate your place of business through a remodel, when they may decide to stay away until the remodel is complete.”

Including Engineers Early in the Process is Critical

“Engineers want and need to be included in the initial phase of design and planning,” said C.J. Archer, Vice President of Marketing for VITOK Engineers. VITOK Engineers have completed over 300 distillery projects, from new complex design through distillery additions. “When designing a distilling space, everything is dictated by your targeted volume of proofed product. If we know your production goals, we can determine the production rate needed to get that volume. Then we can evaluate the process and flow required with the appropriate instrumentation and controls. Then, after customer approval, we specifically look at the structure and utilities. Now we can provide the distiller and architects detailed information on the amount of space and the size of the building needed to meet those production goals while remaining aware of the process and utility requirements, the equipment and vessel specifications, and the necessary safety and code protocols.”

Archer told Beverage Master Magazine that the distillery’s geographic location usually helps determine the look, feel and branding image of the distillery and the product. For example, rural Texas distilleries look different from a modern metropolitan or urban location, and the brand image is usually marketed in the same way.

Include Visual Aesthetics and Alternate Income Sources

“What we have been noticing is the trend of utilizing the distillery equipment as a feature of the visitor experience,” said Archer. “The still, fermenters and all process equipment become integral to the visual experience and become central to the distillery’s design. The distiller must remember, though, that location-specific codes and safety regulations always have something to do with how far any distiller can go with this idea. Still, overall, visual integration is important.”

“We also see distillery designs drawn up to include alternative types of income-producing activities like coffee shops, retail and brand marketing areas, and event spaces. We know bourbon has to be aged for a minimum of three years before it can be bottled, so unless the distiller can just sit and wait, they have to generate income in other ways. Of course, they can always buy whiskey and sell or blend it as their own during the initial aging period, but they can also produce less time-consuming spirits, like gin, moonshine or rum. They can put on and hold special events and, of course, market their brand’s swag.”

Distillery expansion is always on the minds of any distiller. Moving from a batch distillation to continuous distillation puts the distiller in an immediate position to sell spirits on the wholesale market. Archer said that distillery expansion is typical, and the key to successful growth is having the space for the additional equipment, fermentation and grain storage. It’s better and more valuable to consider the aspects of expansion upfront in your design because it’s almost always cheaper and more cost-effective to expand within an established building rather than building a new addition.

The Green Aspect

“There have been recent trends toward a more environmentally responsible mentality with green designs, carbon capturing or building to optimize the use of gravity in the flow of the distilling process,” said Archer. “We’ve been asked to engineer around all aspects of renewable energy, including wind, solar and geothermal energy solutions, while also considering CO2 emission reduction or collection for repurposing purposes. Fermenters naturally give off CO2, as does the spent grain. We’ve seen a movement to capture and compress that CO2 and market it to soft drink and similar use companies. Building so that your production process is mostly powered by gravity, similar to the process used in moonshining days, is another option. Stillage has become a big issue for distillers. Large quantities are produced with dwindling opportunities for recycling or disposal. Sending it down the sewer is expensive, and because of the boom in craft spirit production, some areas are producing too much of it, even for animal feedstock. The green aspect is very appealing upfront. Everyone wants to do it, but without any incentives, it is cost-prohibitive for the craft distiller, so ultimately, only a few actually have the means to do it.”

Perfecting Your Product is Key

“A successful distillery design starts with the product itself,” said Archer. “The first thing to do is produce a good product at the target quantity goals according to your business plan. From an engineering perspective, you need to know the process requirements to produce that product consistently. You must then consider code requirements, safety regulations and ease of operation. This method delivers process repeatability and savings in manpower through possible automation. After you perfect your product and process, you can focus on building the visitor experience. Historically, if you try to do this in reverse, you’ll have problems, and in today’s distillery, you need operational efficiency along with an aesthetically pleasing visitor experience. There’s an inherent tourism aspect to distillery life in the modern marketplace.”

Innovation Helps Modernize Brewing Equipment

By: Alyssa L. Ochs

At Beverage Master Magazine, we’re always looking to keep up with craft brewing trends, which more often than not relates to pieces of innovative equipment and new technologies. Certain types of new equipment are slowly but steadily being introduced to breweries, as are new technologies, tools, mechanisms and improvements to processes relied upon in the past.

  These things factor into how efficiently breweries can operate during challenging times and how memorable their beers are when they reach consumers. To learn more about the role of new equipment in the modern brewery setting, we looked into what’s being used in breweries lately and what industry leaders who work in this space are saying.

Types of Equipment & New Changes

  There are a few essential equipment types that breweries use today. Examples include the malt mill, mash tun, filtration system, heat exchanger and brite tank. Breweries also regularly use pumps, valves, kegs, hydrometers and equipment for dispensing and packaging.

  While experienced brewers are already familiar with all of these things, they might be interested in new equipment options and types of technology to potentially save time, money or labor. Certain machinery may preserve hops better, improve quality control or keep processes more consistent for a better result. Meanwhile, new technology might facilitate multi-purpose machines in a small space or accommodate a shift to using more cans as the business grows. As the industry continues to trend toward aluminum cans, canning equipment is in demand and being considered by brewers who have traditionally stuck to glass bottles.

Equipment and Technology Worth Learning About

  These days, there are fully automated, multi-vessel systems to serve breweries’ needs and specialized wort aeration and oxygenation equipment to

improve brewing processes. Developments have been made to pneumatic conveyors that remove spent grains and tank systems that save water and conserve energy by using compressed air instead of CO2 and have recyclable inner bags. Meanwhile, sustainable design and build practices have been gaining traction for environmental stewardship, future economic vitality and customers’ social enrichment.

  We’ve been following specific advancements, including BrewSavor’s kink-resistant hoses, Thielmann’s multi-purpose aseptic containers, and Twin Monkeys’ low-key and affordable automatic canning line. IntelligentX software compares supply chain and production constraints with beer drinkers’ preferences, and FliteBrite created a “smart flight” serving system to assist menu development at establishments serving craft beer.

  Other machinery and technology-related updates include fully automated, stainless steel crossflow filters for better beer filtration and automated brewing systems with touch screens and mobile technology graphics. These brewing systems are equipped with artificial intelligence features that give feedback on beer produced while integrating customer feedback with manufacturing data. Some professional brewers are not particularly interested in all these “bells and whistles” and believe they are not worth the money and extra staff training to do what they already do best. However, new breweries and current establishments undergoing transition may be curious to adopt a few practical, high-tech features to create a more automated, organized or modern operation.

  Even some seemingly simple pieces of equipment, such as kegs, have been updated to make them more suitable for the current brewing environment. Now you can find stainless steel barrels with automated control systems for better precision and slim diameter kegs to store beer in limited spaces.

  Justin Willenbrink, Blefa Kegs’ sales director for North America, told Beverage Master Magazine that while not much has changed over the years concerning stainless steel kegs, the innovation comes from the barrels’ safety and quality.

  “Each keg from Blefa comes with an integrated pressure relief valve to reduce the risk to producers and on-premise staff by creating a safe failure,” Willenbrink said. “Quality has been the cornerstone of our company for more than 100 years. Durability can only be guaranteed by high-quality material, reliable operating production equipment, highly qualified staff and high-precision manufacturing according to your specifications. These high-quality standards allow us to be the only manufacturer of stainless steel kegs in the world to offer a guarantee of 30 years – a promise to all our customers that they have purchased a reliable and extremely durable asset.”

  Blefa and American Keg partnered in early 2020 to serve the North American market with a domestic manufacturer. Since then, the companies have been working together to upgrade their equipment and support U.S. customer needs, ensuring that efficiency gains in production align with the quality standards of both companies.

  “As a world’s leader in stainless steel packaging, Blefa and American Keg can provide various sizes from 10 liters to 59.62 liters. The U.S. 1/2 bbl, slim 1/4 bbl and 1/6 bbl are the most popular for both on- and off-premise needs. All kegs from our stock are equipped with drop-in D-Type spears from Micro Matic,” Willenbrink said. 

Buy New, Used or Lease?

  When brewers think about updating their equipment, dollar signs often flash before their eyes as new equipment costs start adding up. However, there are options available for breweries on tight budgets, such as leasing new or buying used equipment still in great condition.

  Canning lines are among the most common systems that breweries debate about buying or leasing. Leasing involves entering into a legal agreement for a specified time and works somewhat like a loan. At the end of the lease period, the effectiveness of the equipment may be significantly diminished and therefore not an attractive purchase for another brewing operation. However, you may be able to purchase your current machine for a discounted price. As long as it is still in good working condition, this is an ideal option since staff would already be familiar with it, and you would not encounter any delay in production.

  Capital leases are common, especially when a brewery is only looking to update a single piece of equipment rather than start from scratch or do a total equipment overhaul. It may be beneficial to have a lawyer look over any lease agreement before signing to check the interest rates, accounting implications and terms of the lease in case of equipment malfunctions and who is responsible for repairs. Other considerations include any plans for expansion, durability and logistics of getting equipment into and out of the facility.

What’s Next for Brewing Equipment and Technology?

  There’s a lot to look forward to for brewers who keep an eye out for the next great invention. Many manufacturers and suppliers have a finger on the pulse of the industry and can anticipate the needs of brewers in the years ahead. These companies’ successes depend on how well they change and adapt to the shifts and evolutions of the industry, especially during pandemic times.

  When asked how brewing equipment can best adapt to the changing needs of the modern brewery, Willenbrink said stainless steel kegs are the most well-equipped for providing a quality product because they protect the beverage from harmful UV light and oxidation while ensuring that quality isn’t compromised. 

  “Not only is it the most profitable package, but it is also the most sustainable with stainless steel kegs being 100% recyclable,” he said. “When it comes to the packaging of beer, wine or soft drinks, kegs made of stainless steel offer the best protection. In their reliability, economic efficiency and sustainability, our kegs provide first-class results.”

Willenbrink’s advice to breweries looking at new equipment is to never compromise on quality and make investments in assets that offer maximum safety and reliability for your needs.

  “By choosing a quality supplier, you are making a decision to work with a company that has invested in automation and quality control systems that ensure the highest level of precision and process,” he said. “Comprehensive support from first contact through delivery and continuing with service capabilities from highly qualified technical staff ensure experience and commitment to each investment made.”

  With more automation, there should be greater consistency from one brewer to the next, something vital during staffing changes and high service industry turnover rates. Yet, these machines and technologies don’t remove brewers from their craft; they simply eliminate tedious processes so that beverage producers can have more time to be creative and take their passion for great beer to the next level.

Lots, Codes, and Life: Dating in the Beer Industry

By: Erik Myers

As the number of active breweries in the country exceeds 7000 and roars toward 8000, it’s more important than ever to consider one of the crucial facets of your packaged product: shelf life, and how to communicate it to your customer. It’s not just marketing; date lot coding and traceability is required by the U.S. Food and Drug Administration under the Bioterrorism Act of 2002. However, the exact method of recording date lot codes is ultimately up to each individual brewer, and there is a vast array of practices in the industry that can ensure that your customer knows how fresh your beer is, and that you’re in compliance with federal code at the same time. 

Why Is Date Coding Important?

  The easiest answer to this question is because you must. It’s the law. In the unfortunate situation that your brewery – or one of your suppliers – might have to recall product from the market, having date lot coding that is on every package, is easy to find, and easy to understand will allow your staff and every downstream partner, whether it’s a distributor or a retailer, to comply with the recall efficiently and ultimately save you headaches and money.

  It’s also a great tool that your sales force–or your distributor–can use to be sure that beer in the market is as fresh as possible, it can help with FIFO inventory control and create an accountability tool for you to use with all of your downstream partners.

  Finally, it’s an extra layer of transparency for your customer, as well as an educational tool, allowing you to provide them with the best–and freshest–possible product, and the best possible customer experience.

How to Code

  For better or worse, there is no standard way or best practice guide to follow for date coding your beer. From a practical, legal standpoint, as long as there is a code on your package that is traceable to a batch at your particular factory and you can track that batch back to its component ingredients, you’ve complied with FDA standards. However, esoteric or confusing coding can be a problem in the marketplace and lacks customer transparency.

  Many food and beverage manufacturers use a Julian Code to signify what date an item was manufactured or packaged. Julian Code is a system designed by the U.S. Military to easily date MREs and is easy to track and assign with simple programming tasks. It uses the last digit of the year in question followed by the day of the year.  (For example, a product dated with December 15, 2018 the Julian Code would be 8349.  December 15 is the 349th day of the year in non-leap-years.)  While this provides a standard format that is unique per day and easily traceable on a package and within a database, it is not easy for a customer to read and gain information from. An eager beer drinker looking for a fresh IPA would have no way of knowing what information was being presented to them and might end up looking elsewhere.

  However, a standard date might not be the easy go-to answer that it seems. A report by the Natural Resources Defense Council (NRDC) and Harvard University’s Food and Law Policy Clinic (The Dating Game, 2013, NRDC) notes that confusing date labeling leads to a tremendous amount of food waste in the United States as “open dates can come in a dizzying variety of forms, none of which are strictly defined or regulated on a federal level” and that “although most date labels are intended as indicators of freshness and quality, many consumers mistakenly believe they are indicators of safety.” Putting information on your package that isn’t well thought out may create more harm than good.

Finding the Right Date

  Back in 1996, Anheuser-Busch launched a marketing campaign in a bid to show that their beer was the freshest on the market and coined the term, “Born on date.” It has become a ubiquitous term in the beer industry, regardless of the fact that the date was dropped from all Budweiser labeling in 2015 in favor of a “Freshest before” date. Just because the biggest brewery in the land does it hardly makes it an industry standard, however. It’s not even standard across their entire company.

  Megan Lagesse of Anheuser-Busch InBev’s “The Higher End” craft division notes, “Some of [our] partners (Goose Island, [and] Wicked Weed) are doing dual date coding (brewed on and best by) but everyone isn’t because not all of our production equipment has the capability to dual date code,” she says. “So, we chose best by date coding [for] broader consistency, because everyone understands an expiration date but not everyone is educated enough to know IPAs should be drank as fresh as possible, but you can age wild beers and stouts.”

  Jeremy Danner, Ambassador Brewer of Kansas City’s Boulevard Brewing, notes proudly that Boulevard prints, “both packaged on and best by dates on all cans, bottles, keg rings and exterior boxes. If you’re going to only print one,” he says, “it should be the packaged-on date, as thoughts vary when it comes to shelf life.”

  That shelf life–the basis of rationale behind a best by date–can be difficult, if not impossible, for a small brewery to determine. While larger breweries have the benefit of tasting panels, labs, and a vast number of data points, many small breweries get by with a microscope and a handful of jack-of-all-trade production team members. In small breweries, with limited, sometimes unique, production batches, shelf life is often the product of an educated guess, rather than a robust statistically significant tasting panel. Even pressure from a distributor can affect what date goes onto a package and in many cases a brewer will resort to relying on a packaged-on date and using phrases like, “Do not age” or “Best when its fresh” in lieu of a best by date.

  Doing so, however, relies on the customer to be educated about your product, and that might not always be as easy as it sounds. Pete Ternes of Chicago’s Middle Brow beer notes, “90% of consumers don’t know what it means for a particular beer to have been packaged on a particular date.” While there are many craft beer fans who are incredibly well-educated and can ascertain which beer styles can handle age and which can’t, most beer-drinkers don’t know the implications of a beer’s brewed or packaged-on date.

  Complicating the issue is lack of consistent temperature control once product leaves the brewery. A brewery may post a shelf life of 45 days for an IPA, but not the conditions under which that shelf life has been ascertained or should be maintained. A beer with a shelf life of 45 days at 38F has a shelf life of only 11 days at room temperature.

No Easy Answers

  Unfortunately, until an industry standard or federal regulation is put into place, there is no easy answer about how to best approach lot and date coding. Ultimately, it is up to you to choose the method that you think will both comply with the FDA and provide information to your customers. Regardless of what format you do choose, providing context and information to your customers–whether that customer is the distributor, the retailer, or the end consumer–as to how you arrived at the decision of what lot and date coding method you’ve chosen is the best path and can double as an excellent marketing and education tool for your brewery.

Re-Opening After the Pandemic

By: Donald Snyder, President/Consultant, Time & Tasks

For the first time as an author, I hope this article does not age well. With a bit of luck, you are reading this article in a post pandemic world where these concerns are a thing of the past. That said, as I write this, the world is slowly recovering from a pandemic that had a devastating impact on the hospitality industry including craft distilleries large and small. As you begin to welcome visitors and bring back staff, here are some important and helpful tips when planning your reopening.

Advice from Distillers who have Re-opened

  Throughout the pandemic, the Center for Disease Control (CDC) published fluid and ever-updating recommendations for operating a business to keep both employees and patrons safe. Suggestions like contactless payment, outdoor and reduced seating, staff and customer mask use, and social distancing were mandated to help reduce the risk of COVID-19 spread to keep businesses open, if only at a lower capacity. (https://www.cdc.gov/coronavirus)

  However, the ultimate decision of whether a tasting room could re-open to the public was in the hands of local regulators. Every state had a different set of requirements for operating a business during the pandemic. Some states, like Florida, reopened and removed capacity limits very early in the pandemic as compared to New York City where most hospitality restrictions were not rescinded until the summer of 2021. Soon after the nation-wide lock down in the spring of 2020, some distilleries were able to re-open under various restrictions.

  Cardinal Spirits Distillery in Bloomington, IN was able to open in 2020 under pretty tight restrictions. The distillery opened for carryout bottle, food, and cocktail mixes only.  Additionally, they re-configured their front entry area into a curbside drive-by for order pickup. The state of Indiana did not permit cocktails-to-go so Cardinal Spirits developed hand labeled bottles of mixer kits that people could use to make cocktails at home. Using social media and on-line platforms, they maintained and increased customer engagement with distillery tours, cocktail classes, and even virtual tastings. They hope to fully re-open in Spring 2022 although they have recently re-opened their restaurant for in-distillery dining. Jeff Wuslich, co-founder and President of Cardinal Spirits, recalls his concerns with reopening. “We are most worried for our staff. We do not believe they should have to enforce mandates and safe behavior, but we know it will likely happen. It keeps me up at night. I believe that with our air circulation, safety protocols, and distancing we will all be safe, but I hate to think about our staff having to argue with customers.” Jeff offers this additional advice for distilleries thinking about their own re-opening. “Think of the customer and what experience you would like them to have. Then, work backward from there.” 

  Smooth Ambler Distillery in Maxwelton, WV was also impacted by COVID-19. At the beginning of pandemic, the entire distillery closed public-facing operations, including their gift shop and tours for about a month. During that time, they re-allocated their labor and resources into making hand sanitizer to be donated to front line workers across the country. Once they had a better understanding of the virus, they slowly reopened their production facility with a new set of rules that included social distancing, segregated teams, masks wearing, and frequent sanitization. Smooth Ambler’s continued priority is the safety of their employees and guests.

  They were cautious about reopening the tasting room. Many of their customers were from out of state so they initially re-opened to the public with curbside pickups only. A few months later, they opened with limited capacity and slowly increased indoor occupancy as the guidance from the state permitted. Masks, temperature checks, and hand sanitization were available for all guests. So far, the re-opening has been successful for Smooth Ambler as more and more people are beginning to travel again. Travis Hammond, Operations Manager of

  Smooth Ambler, cautions distillers not to be too hasty or rigid during their public reopening. “The past year has been very difficult on everyone – the best advice I can give to other distilleries that are about to reopen is to be patient and flexible.”

  Reopening slowly and cautiously with the appropriate safety protocols in place has given many distilleries across the country a beacon of hope that things can return to a sense of normalcy. However, even with the best precautions, there still can be issues. Asymptomatic employees and customers that spread the virus can be a serious risk to all parties involved. For those in the beverage industry, contracting COVID-19 can be especially dangerous as a possible long-term loss of taste and smell could impact a distiller’s ability to make and blend high quality spirits. In addition to transmission risks from reopening, there are also risks from patrons fighting required safety protocols.

  Golden Moon Distillery in Golden, Colorado experienced that firsthand when a customer refused to wear a mask and retaliated by shoving an employee. Physical altercations with employees about safety policies or verbally abusive customers are real risks that distillers need to consider when planning for a full or limited re-opening. Stephen Gould, Proprietor and Master Distiller of Golden Moon Distillery has made employee training a pivotal part of his re-opening plan. “We’ve coached our team members to be extremely polite and courteous when asking folks to wear masks. Our main concern is the safety of our staff and customers. Having said that, the one piece of advice I can give folks that are reopening is that they need to work hard to make both their staff and their customers feel safe.”

  Another consideration for reopening is how to deal with heavy foot traffic as people continue to feel more comfortable traveling. Large tourist areas like central Tennessee have many craft distilleries that offer tours, tastings, and spirits for every palate. Pigeon Forge, TN is in the gateway to Smoky Mountain National Park that sees over 10 million visitors per year. In the spring of 2020, when everything shut down, the owners of King’s Family Distillery in Pigeon Forge were understandably nervous. Like many distilleries, by taking advantage of small business loan programs and pivoting production to hand sanitizer for local consumption, they were able to stay afloat. Cara King, Owner of King’s Family Distillery, is starting to see the light at the end of the tunnel. “When our state began lifting restrictions in 2020, the people flooded back in.

  More than before, even. We took precautions, put up plexiglass, and welcomed the tourists, masks, and all. Our distillery has reached the other side of this epic world event bigger than we were before.”

Capital Investments and Infrastructure

  Safety protocols, standard operating procedures and thorough employee training are critical to a successful re-opening. However, some additional capital investment may be required. Dalkita, an engineering and architecture firm that assists distilleries with design, safety, and construction, was instrumental in helping businesses re-open.

  Colleen Moore, Director of Marketing & Operations for Dalkita, kept up to date with all the CDC recommendations, re-opening phases, and safety recommendations. Dalkita kept the distilling industry updated with recommended and required re-opening procedures via regular webinars and blog updates (https://www.dalkita.com/news/).

  The group quickly became aware that each state and jurisdiction had varying requirements for re-opening protocols, social distancing rules, seating capacity limits, and mask requirements.

  In terms of physical and capital improvements to the distillery’s public spaces, Colleen Moore from Dalkita has been advising distilleries what they should consider. “With COVID-19 in mind and trying to reduce the likelihood of a lockdown situation due to a highly communicable airborne disease from recurring, I would suggest upgrading ventilation inside buildings. Any feature that would increase the amount of outdoor air you can bring into a building such as window walls, roll-up glass garage doors, and new increased air handling units with better filtration media and filters.

  If cold, rainy, or snowy weather put a stop to your outdoor activities, consider adding flexible open courtyards or structures with roofs and no walls for use during inclement weather. Anything that can increase the health of the people using a facility is a good investment.”

  As I write the article, I fully acknowledge that regulations are still changing. I began writing this article in March of 2021 before the mass availability of COVID-19 vaccines while most distilleries were under 30-50% occupation and seating capacity. It is now July 2021. Some states are open 100% with no restrictions but the Delta variant is growing. The article will be published the Fall of 2021 and who knows how much the world will change by then.

  For distilleries reopening or increasing capacity in 2021 or early 2022, connect with local authorities for the latest restrictions. Make every effort to keep employees and guests safe. Then again, by the time you read this, hopefully the pandemic and social distancing will be just a distant memory as we all return to normal.

Legal Implications of Playing Music at Your Brewery

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

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

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

What the Copyright Act Protects

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

Why Your Brewery Needs a Performance License to Play Music

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

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

When You Need to Consider Acquiring a Performance License

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

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

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

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

How to Obtain a Performance License

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

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

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

How much a Performance License will Cost

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

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

Craft Malt with a Conscience

By: Erik Lars Myers

Sebastian Wolfrum, the German-born owner of Durham, North Carolina’s Epiphany Malt, wants to do the right thing.

  Wolfrum’s epiphany came in 2012, while he and his wife attended a meeting for local farmers about how they could get involved with North Carolina’s burgeoning craft beer industry. The problem, however, was that at the time, there were very few options for farmers to sell the crops they might grow. North Carolina’s one malt house at the time, Asheville’s Riverbend Malting, was still nascent and small. Wolfrum, drawing on his background in brewing and malting education at Ayinger Brewing near his hometown of Munich, and his experience at Natty Greene’s Brewing Company in Greensboro, North Carolina, started Epiphany Craft Malt in 2015.

  Epiphany has a lot of disadvantages to cope with, like any other small manufacturer, primarily driven by scale. They are tiny compared to national and international malt providers like Rahr, Briess or Weyermann, and they lack the economy of scale that allows them to produce high-quality malt at competitive prices. It is a trade-off that brewers must be willing to make when using a local maltster. You will pay more for the product—in some cases a lot more—but that money goes to support the local economy, and you are potentially buying a product with more of a local “terroir” or “maltoire.” In some cases, like Epiphany, it means supporting even more than just a local economy.

  Wolfrum says that evening out the environmental impact of the business is considerably more difficult at a small scale. Large maltsters have the personnel and resources to dedicate toward reducing a carbon footprint, but a three-person operation like his must find another way.

  Enter Indigo Agriculture, a company that provides farmers financial incentives to practice regenerative agriculture—a method of farming that improves soil health, builds ecosystem biodiversity and closes the “carbon cycle.” Wolfrum was first made aware of regenerative agriculture in his Ayinger days while working on their Regional Impact Study back in 2002.

  He describes farming as having essentially three modes:  The first he considers “the old way,” what he deems “exploitative.” In short, it involves farming a piece of land until all of the available nutrients are gone and extracted, then moving on to a new plot and beginning again.

  The second he deems “contemporary” or “conventional.” It is farming land and using additives or practices that maintain soil health, allowing the farmer to continue using the same plot each year without degeneration. Those practices may involve crop rotation or artificial soil additives to maintain soil health and keep it at the base level that the farmer needs. It might also take the form of supplemental fertilizers and nitrogen additives that take energy—and thus carbon—to produce and disseminate.

  The third is regenerative, an ethos that encourages building and improving soil health, increasing water retention and biodiversity and significantly reducing carbon emissions during farming and cleansing the atmosphere of CO2. Regenerative practices include implementing crop rotation and cover crops, no-till farming, reducing fertilizer and pesticide use and increasing soil biodiversity through compost additions and well-managed livestock grazing practices—ideally, many of those tactics working together in concert.

  It’s not really reinventing the farming wheel. These practices have been around for decades or longer, but using them together is the goal. Unfortunately, a commercial farmer doesn’t always have the financial incentive to invest in natural soil additions, plant a non-harvested cover crop in a field that could generate income or take the short-term risk of not using pesticides.

  Wolfrum was put in touch with Indigo Agriculture through Dogfish Head Brewery in Rehoboth, Delaware. A chance meeting at the Brewers’ Association Craft Brewers Conference had him talking with the lead brewer at Dogfish Head’s small-batch/brewpub facility, and they found their interests aligned. Together, they worked on a project released in September 2020, Dogfish Head’s “Re-Gen-Ale, the first traceably sourced beer to address climate change.” With the help of Indigo Agriculture’s grain marketplace, Dogfish Head purchased raw regeneratively farmed wheat, hops from several local farms on the East Coat and barley from Epiphany. In doing so, they created a traceably sourced beer with a small carbon footprint. Dogfish Head also committed to purchasing carbon credits to offset the production of brewing the beer.

  When Wolfrum learned about Indigo’s regenerative programs, he immediately got in touch with his local growers. In 2020, three of Epiphany’s farm sources began working with Indigo Agriculture, farming regeneratively to provide a carbon-neutral, or even carbon negative, source of barley for Epiphany’s malting operation. It hasn’t been a difficult sell. “Talking to these farmers, no matter where they are—in eastern North Carolina or Virginia—you don’t need to explain it to them. They live it. They know that it’s not going to get easier to grow anything without some work,” he says.

  Other farms they work with provide heirloom corn and rice as well. So far, it’s a small sliver of Epiphany’s output—in 2021, the entire crop of regeneratively farmed malt is spoken for by just two of his customers—but his plans do not end there.

  Wolfrum has started to build financial incentives for farmers into his own business plan, paying more per pound of grain to incentivize his farmers to add at least one regenerative practice into their operation. As Epiphany grows, he plans to create a contract with each grower that requires them to add regenerative farming practices into their operation but also ensures that they’re compensated for doing so. “We will pay for it,” he says, “We’re going to pay a little bit more because we expect you to do the right thing.”

  He hopes that he can also convince brewery and distillery partners to do their part to reduce their carbon footprint in freight and their day-to-day operations as well.

  According to Epiphany’s Three-Year Resilience Plan, in 2020, “each pound of malt produced by Epiphany produced 0.93 lbs of CO2,” so the company bought carbon credits to offset all 421 metric tons of CO2 produced, officially making Epiphany Craft Malt a carbon-neutral craft maltster.

  Epiphany’s virtuous cycle doesn’t end at carbon credits, however. In 2020, they started working with two farmers who grow heirloom and ancient grains—both corn and rice. Wolfrum recognizes, however, that some of these grains have complicated pasts.

  The origin of the heirloom corn that Epiphany sources can be traced back to Native American tribes of Virginia, and the heirloom rice was first brought to the Americas and flourished as part of the Transatlantic Slave Trade. “If we want to help create beers that incorporate these grains,” Wolfrum says, “we have to turn our attention toward understanding the injustice at their roots.”

  Because of that, Epiphany donates a portion of the sales of each of these grains to appropriate organizations. For the corn, the American Indian Science and Engineering Society, which helps to increase the representation of Native Americans in STEM. For the rice, Epiphany donates to a local charity, the Southern Coalition for Social Justice.

  “At the moment, it’s really small scale, and we’re not a very big player,” Wolfrum says. “Could I use those couple thousand dollars we spend on [incentives, carbon credits, and donations] for something else? Sure. But you have to start somewhere. That’s my perspective. It’s not perfect, but it’s the right thing to do.”

  Learn more about Epiphany Malting, the grain and malt they offer and read their Three-Year Resilience Plan at www.epiphanymalt.com

  Learn more about Indigo Agriculture and its grain marketplace at www.indigoag.com

  Erik Lars Myers is an entrepreneur, author, professional brewer, and lover of beer. He currently works as an independent consultant in the brewing industry in Durham, NC where he strives toward innovation in fermentation through a wide variety of projects.

Best Practices: Beer Wholesaler Agreements

By: Kary Shumway, Craft Brewery Financial Training

The wholesaler agreement can be a point of contention between breweries and wholesalers. Before any beer is delivered, the agreement must be reviewed, negotiated, and signed.

  The challenge with many agreements is that both parties want the terms to be in their favor. Breweries want options to get out of the agreement, and freedom to move their brand if the business relationship isn’t working.

  Wholesalers want the brewery to be committed to them indefinitely. From the wholesaler perspective, they invest millions or tens of millions, in infrastructure and want to be sure that brands stay on the trucks to pay for all the investment.

  Both parties want the advantage, but at a minimum, neither party wants to get taken advantage of in the agreement.

  With so much emphasis on the wholesaler agreement, what steps are you taking to ensure you get the best arrangement possible?

  Below are five steps you can take to improve your agreements, and contractual relationships.

Five Steps to a Better Agreement

1.   Seek first to understand (Basic agreement structure and terms)

2.   Know your state laws

3.   Do your research, ask questions, determine the wholesaler options

4.   Play a game you can win (Develop your own standard agreement)

5.   Self-Distribute (Enter into an agreement with yourself)

  Since we’re talking legal contracts, here is the important disclaimer: I’m not an attorney, and this is not legal advice. The guidance here should be used for informational purposes only.

Basic Agreement Structure and Terms

  As any business textbook will tell you, the primary purpose of agreement law is to enforce an agreement between parties. In this case, the parties are the wholesaler and craft brewery. For there to be an agreement, an agreement must exist, and the parties must have freely intended to be legally obligated. A breach occurs when one party breaks a big promise in the agreement.

  The requirements of a legally binding agreement are: 1) offer, 2) acceptance, 3) consideration, 4) obligations by parties, 5) competency and capacity, and 6) a written document.

  In other words, a wholesaler offers to distribute the beer of a craft brewery, and the brewery accepts. The brewery agrees to brew beer and sell it to the wholesaler. The wholesaler agrees to pay for it. The brewery is obligated to make a saleable product, and the wholesaler is obligated to sell it.

  Both brewery and wholesaler state they are competent and have the capacity to fulfill these obligations. All this is then wrapped up in a written agreement.

  The wholesaler agreement contains a variety of clauses and terms that you should understand: Trademarks, Terms of Sale, Assignment, Transfer, Ownership Changes, and Termination to name a few. A typical wholesaler agreement can be 20 pages in length and contain a dozen or more different clauses. It’s a lot to understand, but very important to do so.

  To begin, read over the agreements that you already have in place. Highlight any items that you don’t understand and start asking questions. What you don’t know can hurt you in a contract situation.

Know Your State Laws

  Thanks to the 21st amendment, we have 50 different sets of laws related to alcohol distribution. Many of those laws are difficult to understand and a giant bore to read. Get a lawyer and get a commonsense interpretation of what your state laws are. Specifically, know your rights and obligations.

  The Brewer’s Association does a nice job in summarizing the various state laws. However, the summary only scratches the surface of what you’ll need to know about the rules of engagement. Know the rules, use them to your advantage, and build them into an agreement that works best for your brewery.

  Agreements and State Laws: Agreements and state laws are often intertwined. There may be sections of the wholesaler agreement that refer to the applicable state laws. For example, ‘wholesaler or supplier may terminate this agreement in accordance with applicable state laws.’ An understanding of the state laws in combination with a working knowledge of agreement rules will give you a leg up when negotiating your wholesaler agreement.

  Lastly, there is a common assumption that the agreement really doesn’t matter that much because the state law will over-ride the agreement anyway. For instance, in a case where an agreement says one thing and the state law says another, the state law wins.

  I’m not a lawyer, but I’ve hired lawyers to deal with this issue. What I’ve found is that the question doesn’t have a clear answer. Bottom line – the agreement still matters.

Do Your Research

  When opening up new sales territories do your homework to find the best wholesaler partner. Talk to other craft breweries, talk to retail accounts (on and off premise), and of course meet with prospective wholesalers. Do your research to find your best match. There’s no point in learning about agreements and state laws if you wind up with a lousy partner.

  Many of the larger craft breweries hire consultants to conduct market research in advance of opening a new territory. The consultants talk to retailers, learn the nuances of the market, and find out who the best wholesaler is. Then they gather information and report back to the brewery with a recommendation.

  Key Questions to Ask Your Wholesaler:  You may not have the resources to hire a consultant, but you can do some leg work yourself. Below are sample questions to ask wholesalers during the research phase:

•    How do you assess opportunities for my brands at retail?

•    What is a recent example of a brand launch success?

•    What are the demographics and tourism of the market?

•    What is the pricing landscape?

•    What did you do for craft beer week?

•    Tell me about your draft line cleaning process and personnel. If line cleaning is not allowed by state law, ask what they do to ensure lines are cleaned (surveys, education) and to determine if they are cleaned (logs, vendor, and frequency of service)

  Invest the time upfront and do you research on your wholesaler options. An agreement helps define a partnership. It’s up to you to find the best wholesaler to partner with.

Play a Game You Can Win

  A wise friend once told me: “always write the agreement.” In other words, if there is an option, don’t let the other side present you with the agreement. Do it yourself.

  Writing the agreement ensures you have control over what gets included or excluded. It allows you to shape the language and create an agreement that works best for your brewery. Have your lawyer develop your own standard agreement. Talk with them about what’s important to include and what isn’t. Use your working knowledge of agreement law and state laws to shape an agreement that works.

  Use Your Leverage: When you meet with a wholesaler, simply present the document as a matter of fact: “This is our standard agreement.” They may negotiate certain points, or counter with their own standard agreement, but they might just sign what you give them.

  Many craft breweries have their own agreement these days, even the smaller guys. Craft breweries have leverage with wholesalers. If you have a brand that multiple wholesalers would like to have, they will make concessions on the terms of the agreement to ensure they get your brand.

  Recognize and understand where you have leverage and use it to your advantage. Develop your own standard agreement, include the terms you want, and insist that it is used to govern the wholesaler relationship.

Self-Distribute: Enter into an Agreement with Yourself

  Another option related to wholesaler agreements is to avoid them altogether and self-distribute your own beer. State laws will dictate whether you can do this, and what the guidelines are.

  There are many advantages of distributing your own beer: you keep the gross profit that normally goes to the wholesaler, you control where and how the brands are presented at retail, and you ensure the brands get 100% focus and attention. Despite best efforts, a wholesaler with hundreds of brands can’t possibly present your beer during every sales call. But you can.

  There are many challenges with self-distribution: increased capital costs for trucks and warehouse space, more people needed to sell and deliver the beer, and a new business model that you need to learn. Nothing wrong with learning, but it can be expensive.

  The fundamental question to ask is whether self-distribution can be profitable. To answer the question, check out the short guide on creating a financial pro forma for self-distribution. This will walk you through the steps of putting together your sales projections, expected margins, operating costs, and capital investments needed.

  Research your state distribution laws, do the financial analysis, and determine if self-distribution is the right move for your brewery.

Wrap Up

  The wholesaler agreement is important, and it’s important that you get it right. Understand the agreement terms and know the state laws. Do your research on the market and the wholesaler options. Create your own standard agreement and use your brand leverage to get the wholesaler to sign it. Lastly, explore whether a self-distribution option makes sense for your craft brewery.

  It’s up to you to find a great wholesaler partner. It’s up to you to ensure you have a good agreement that governs the relationship. Use the steps outlined here, talk to other craft breweries, and consult your attorney. A good wholesaler agreement is within your power to achieve. Now, go and get it.

For more information please visit…

inventory-count-process-scorecard/

Lawson’s Finest Liquids: A Hophead’s Nirvana

By: Nan McCreary

In the small town of Waitsfield, Vermont, an iconic brewery looms large among visitors. It is Lawson’s Finest Liquids, producer of world-class IPAs and unique maple beers and, according to many, a benchmark for hoppy beers among the nation’s beer drinkers.

  “I’m a hophead,” owner Sean Lawson, along with his wife, Karen, told Beverage Master Magazine. “I’m a fan of hops in a big way.” This love of flavorful beers has been a driving force in Lawson’s life since he first started making homebrew as a college student at the University of Vermont. “In the beginning, I was making five gallons at a time,” Lawson said. “My friends loved it. I couldn’t make it fast enough.” 

  After graduation from college with a bachelor’s degree in environmental studies and a master’s degree in forestry, Lawson pursued a career as a scientist and outdoor educator but continued to hone his brewing skills. The art and the craft of making beer were in his genes.

  Finally, in 2008, with increasing demand for beer from his friends, Lawson and his wife, Karen, got a beer license and built a 280-square-foot nano-brewery in a shed next to their house. Lawson brewed his beer one barrel at a time, producing 31 gallons—or 10 cases of beer—all while keeping his day job. 

  “I worried that if I turned my hobby into a full-time job, it would end up being a drag, but the opposite happened,” he said. “It really sparked my passion. I loved coming up with new recipes, and I really enjoyed the whole process from start to finish. I would walk into the brewhouse and make things up as I went. I had a lot of ingredients, so I would look at what I had and say, ‘Umm, what do I want to brew today?’”

  As Lawson’s passion grew, so did his customer base. “From day one, we didn’t have enough beer to go around,” Lawson said. At the time, he was making a few maple-infused beers —this was Vermont, after all—but the core of his business was IPAs, which were flying off the shelves. In mid-2008, Lawson decided to quit his day job and make his “hobby” a full-time vocation. He expanded the brewery to a seven-barrel system, which he thought was a big leap but, in fact, still wasn’t enough to keep up with demand. 

  “The beer kept going away faster than I could make it,” Lawson told Beverage Master Magazine. “I could only do two batches a week because it was a small building, and I’d stuffed in as much equipment as I could.” 

  In the meantime, the accolades kept coming and coming and coming. In 2010, Lawson’s Finest Liquids became the smallest brewery ever to capture an award at the World Beer Cup, winning the Bronze medal with their Maple Tripple Ale in the specialty beer category, followed in 2012 by a Silver medal win and another Silver medal in 2016.  Lawson’s beers were also a big hit at the American Craft Beer Festival in Boston, the largest beer festival on the East Coast.

  “People were impressed with the quality and flavor of the beer,” Lawson said. “Skiers and tourists would come to Vermont, buy the beer and take it home and share with friends. ‘You gotta try this beer,’ they’d say.  There was a lot of ‘word of mouth’ success for our products.”

  All along, Lawson’s goal was to “produce beer of the highest quality with outstanding freshness.” Lawson strongly felt that to retain that freshness, the beer needed to be kept cold during the entire journey from the brewery to the customer.

  “When I started in 2008, it was a challenge to get the local distributor to keep it cool in the warehouse,” Lawson said. “But once the brand caught on, I made it a prerequisite: keep it cold in the warehouse, on the truck and while on display at the retailer.”

  Lawson’s persistence paid off. His “home run” beer was Double Sunshine, a double IPA packed with juicy, lush fruit character and herbal aromas with an 8% ABV. With the increased capacity of the seven-barrel brewery, this beer—and other specialty Lawson’s Finest Liquids—created a sensation in Vermont and throughout the Northeast, such a sensation that demand continued to get further ahead of supply. Clearly, Lawson needed to produce more beer. “I read about a brewery in Stratford, Connecticut—Two Roads Brewing Company—that offered contract services, so I decided to consider this option as a way to expand without investing in more equipment or employees,” he said. 

  From the beginning, Lawson was very particular about his requirements. His reputation was on the line, and he was adamant that this beer meet his and his fan’s expectations. “The first thing I wanted to know was if the chemistry of their water would meet my standards for making quality mash,” Lawson said. “As it turned out, the water they used for brewing was nearly identical to what we used in Vermont.”

  Lawson also wanted to differentiate this beer from what he brewed in Vermont, so he created Sip of Sunshine, inspired by Double Sunshine but lighter in color and easier on the palate, and still at 8% ABV. Expecting some trial and error in creating a new brew, everyone was surprised—and delighted—that the first two batches were hugely successful. They hadn’t even packaged the beer yet, so they sold it on draft. “It took off from day one,” Lawson said.

  Over the next three years, inspired by the continuing popularity of his beers, Lawson increased production at Two Roads, with its 100-barrel capacity, while making specialty beer at his brewery at home. He also began expanding his footprint with distribution in Vermont and Connecticut and eventually to Massachusetts, Pennsylvania, Maine, New Hampshire, New York, Rhode Island and New Jersey. Sales skyrocketed, and, ultimately, the Lawsons were able to realize the culmination of their original business plan: To build a large production facility of their own and have a taproom where they could welcome the public. In 2018, that “dream” became a reality when the Lawsons opened their 40-barrel facility and timber-framed taproom in Waitsfield, located in the heart of Vermont’s Mad River Valley. The taproom is open year-round and features 10 to 12 beers on tap, as well as a food program with an emphasis on local fare. Lawson’s Finest boasts 41 full-time and 17 part-time employees. That’s a far cry from the mom-and-pop operation that began in an outbuilding on their property.

  Today, after a 20-plus year journey, Lawson’s Finest Liquids is recognized as one of the best breweries in the Northeast, especially among hopheads. The brewery produces dozens of beers, some year-round and others as special releases. Year-round beers include the flagship Sip of Sunshine; the Super Session series, brewed with the same malt base and specialty malts but each brewed with a different single-hop variety; and Little Sip, a cousin to Sip of Sunshine but with 6% ABV. Sip of Sunshine and the rotating Super Session series are brewed at Two Roads, and the rest at the Waitsfield Brewery. Lawson keeps one barrel in his brewhouse for experimenting with new flavors. If he likes the beer, he will create small-batch productions on his original seven-barrel brewery. “We’re always looking for new flavors,” he said.  “That’s where we have our fun. These are specialty beers that are only available in the taproom.”

  While Lawson’s Finest Liquids has enjoyed phenomenal success, Sean and Karen have not forgotten one of the core values that inspired their journey—to give back to the local community and communities where they do business. “Even when we were very small, we’d give a portion of our proceeds to non-profit organizations here in the Mad River Valley or Central Vermont,” said Lawson. 

  Today, this mission is organized under their Social Impact Program. The SIP includes six initiatives that support healthy communities, food and economic securities, natural resource protection and sustainable recreation in the Green Mountains. One of these initiatives is a “no-tipping” policy that offers a living wage and generous benefits to all employees. In lieu of tips in the taproom, Lawson’s Finest Liquids invites guests to donate to the Sunshine Fund, the heart of SIP. 

  “It has been wildly successful, way beyond our dreams,” Lawson said. “In the first year, we raised over $380,000. Even with COVID, donations continued with our drive-thru retail store. From October 2018 to present, we have raised over $575,000 just through the Sunshine Fund.”

  In 2020, the Lawsons received the Outstanding Vermont Business award in recognition of the brewery’s employment growth, success in the marketplace, company expansion and community involvement. The award is sponsored by the Vermont Chamber of Commerce and Vermont Business Magazine.

  As Lawson looks to the future, he said the plan is to “grow the business to thrive and not to sell.”  They hope to accomplish this by optimizing capacity and continuing the use of Two Roads to produce their flagship beers and Waitsfield for specialty releases. While they continue to increase points of distribution within the Northeast, there are no new market expansions planned in the near term. In the meantime, Lawson remains modest in his attitude toward his achievements.

  “A lot of people make great beer,” he told Beverage Master Magazine. “Why have I been successful compared to others? Maybe a sprinkle of magic.” That, and creating a nirvana for hopheads.

For more information on Lawson’s Finest Liquids, visit their website at www.lawsonsfinest.com

Exploring the Variety of Spirit-Based Canned Cocktails

By: Becky Garrison

Over Memorial Day 2014, Bronya Shillo launched the Fishers Island Lemonade, a signature cocktail that originated at her family’s bar, The Pequot Inn, on Fishers Island, New York.  She refined their decades-old recipe and canned the premium distilled vodka, whiskey, lemon and honey cocktail. The drink is one of the first craft cocktails in a can, making Shillo and her brand a leader in the ready-to-drink market. Fast forward to 2021, and she’s expanded her portfolio to a full family of vodka and whiskey lemonade canned cocktails, as well as a fun and innovative frozen Fishers Island Lemonade spirit popsicle.

  Convenience remains the most touted selling point in the growing RTD market. According to Nielsen IQ, in 2019, annual sales in this segment were up 574%, and malt-based cocktails now account for $4.7 million in annual sales. Spirit and wine-based RTD cocktails are generally available in smaller packages; they’re also more established and generate larger sales—$62 million and $83 million in annual sales, respectively, according to the May 21, 2019, Nielsen IQ. One factor that may be influencing some of these sales from growing even higher is that in con-trol states such as Oregon, spirit-based cocktails can only be found in liquor stores instead of grocery stores in non-control states.

  In 2020, consumers in lockdown sought ways to savor their favorite spirit-based cocktails once enjoyed at a bar or restaurant. Establishments responded to this demand by offering cocktails-to-go. Depending upon state laws, these to-go packages contain all the ingredients needed to make a given establishment’s signature drinks or all the items sans the alcohol.

  This to-go trend looks to continue as the world opens up post-COVID, with customers looking for convenient ways to consume their favorite cocktails while on the go. Molly Troupe, Master Distiller for Portland-based Freeland Spirits, speaks to the appeal of canned cocktails. “Canned cocktails are great for those who like convenience and don’t want to make their own cocktails at home. Cans can go much easier than a bottle to the lake, on a hike or wherever adventure may take you.”

Carbonated Canned Cocktails

  The majority of spirit-based cocktails appear to be carbonated and designed for easy sipping with a low ABV. Ali Joseph, co-owner of Portland, Oregon’s Wild Roots, commented about their 2021 foray into the RTD market. “We always recommend simple two-ingredient cocktails to our fans and wanted to take that idea one step further. There’s nothing easier than cracking open a can.”

  According to Tuan Lee and Hope Ewing, co-founders of Los Angeles-based Vernet, they launched their line of sparkling craft cocktails when they observed the market was dominated by bulk spirits made with flavoring agents. Ewing said, “We really wanted to make something high-quality that we would drink ourselves. Tuan’s dream was to share his love for LA’s immigrant cultures through food and drink, and ready-to-drink cocktails felt like a great vehicle for this. We wanted to package in cans for convenience—being pool-friendly, beach-friendly and lightweight —and because aluminum is the most recyclable packaging around.” She added that their goals in producing these products were twofold. “We wanted to showcase the awesomeness of LA’s immigrant food cultures by using ingredients we loved from local farms and markets and to make something as complex and high-quality as I was used to making in craft cocktail bars.”

  Canned vodka cocktails like those produced by Wild Roots differentiate themselves by using natural ingredients instead of “natural” flavorings often found in canned vodka products. Wild Roots’ canned cocktails are made using their top-selling raspberry, blackberry/marionberry and peach spirits. They also added lemon to the lineup because they often use citrus in their Wild Roots cocktails. Spiritfruit is a ready-to-drink canned vodka soda made using all-natural ingredients, a splash of real fruit and five-times distilled corn-based vodka.

Gin & Tonic Canned Cocktails

  In the spirit-based RTD market, taste and innovation are already proving to be key market differentiators. Take, for example, the different ways three distillers produced a canned classic gin & tonic.

  Melissa and Lee Katrincic, co-founders and co-owners of Durham Distillery in Durham, North Carolina, launched their Conniption canned cocktails in 2018 and were among the first distilleries in the U.S. to add them.

  “We saw the increasing popularity of malt-based seltzers and with them mimicking cocktail flavors and/or names. We wanted to bring authentic, delicious spirits based cocktails in the convenience of a can,” Melissa Katrincic said. They chose rosé spritz, cucumber & vodka and gin & tonic because they found that these seasonable flavors are perfect for the warmer months in the southeast United States. Their gin & tonic emerged as the fan favorite.

  Durham’s canned cocktails must be prepared in large batches of approximately 5,000 cocktails. This process involves ensuring that the precise amount of ingredients are measured and pumped into their 450-gallon tanks, then mixed and carbonated. They have an automated canning line for getting the product into containers, whereas their spirits are hand bottled. The canning line is made of hundreds of working parts that are finely tuned but can sometimes be problematic if out of adjustment. Carbonated products can also be prone to “misbehaving,” leading to the final product being foamy or difficult to get into the cans at the right volume.

  Freeland Spirits added canned cocktails to their lineup following the success of the kegged ver-sion of their Gin and Rose Tonic, which they offered in their tasting room. They launched their canned version in 2019, followed in 2020 with the French 75. The latter is a collaboration made using women winemakers and distillers and features Freeland Gin, Chehalem Chardonnay, lemon and simple syrup.

  According to Troupe: “While canned cocktails add an additional step to spirits production, play-ing with carbonation levels and different cocktail ingredients is a lot of fun.” Also, stability is a more significant issue because these canned cocktails are lower-proof than their bottled spirits.

  As the makers of Aria Portland Dry Gin, Martin Ryan Distilling Company in Portland, Oregon, is known as a gin house. So rather than develop another product in a different spirit category, a G&T seemed like a natural extension of the Aria Portland Dry gin brand. Ryan Csansky used his background in the bar and restaurant industry to create an in-house tonic using a proprietary blend of lime, bergamot and lemongrass, hints of allspice, orris and star anise, a flavorful tonic that complements the classic London Dry style of Aria Gin. The result is a G&T canned cocktail made using all ingredients with chemicals or artificial sweeteners and one of the lowest sugar counts of any tonic on the market. Since a canning line is an expensive system to purchase, they work with a mobile canning company that brings their system and operating crew to them as needed.

Other Non-Carbonated Bartender Inspired Cocktails

  Drnxmyth, a collective of drink makers with a shared interest in bringing fresh craft cocktails to people everywhere, invented an ingenious bottling technology that, in their estimation, unlocks the freshest cocktails ever produced. Each drink created is a collaboration between them and a bartender, drink maker or drinksmith, who shares in the sales profits for this particular drink.

  The TTB licensed Drnxmyth’s factory to handle bulk spirits and fresh cold press juicing, batch-ing and filling. A patent-pending bottle separates the spirits from the fresh ingredients, since al-cohol alters the sensorial nature of juice and freshness over time. Then the drinks are pressurized at 85,000 psi, which brings the microbial count in the juice close to zero. After that process, the beverage will remain fresh for five months while refrigerated and unopened.

  Through his work in the music festival industry, Neal Cohen, co-founder of Atlanta-based Tip-Top Proper, saw demand growing for quality cocktails, though in his assessment, the category had yet to deliver the quality and convenience for classic, spirit-forward, non-carbonated cock-tails in high volumes. “We fantasized about creating a world-class cocktail in an easy-to-serve vessel, thinking maybe we could help solve a problem for venues, events, restaurants, bars, air-planes and regular folks at home on the couch. Eventually, we stopped fantasizing and started actually doing it,” Cohen said.

With that mindset, Tip Top Proper was founded in 2018, focusing first on the trifecta of bitters-forward, stirred, high-proof cocktails—Old Fashioned, Manhattan and Negroni. Next, they gravi-tated toward a “Shaken Line”—Margarita, Daiquiri and Bee’s Knees—all cocktails that allow for warm weather, outdoor consumption. Their products come in 100ml sizes, which Cohen said is the appropriate single-serve size for a cocktail.

  In 2016, The Perfect Cocktail began offering classic cocktails—Old Fashioned, Manhattan and Negroni—packaged in mini bags. Their “made in Italy” production process and functional and sustainable packaging are patented to ensure the best mix of convenience and flexibility.

  Alley 6 Craft Distilling in Healdsburg, California, first came out with their canned Old Fash-ioned in 2019 in response to consumer demand for a portable version of the drink made in their tasting room using rye whiskey or apple brandy and candy cap (mushroom) bitters. A bottle didn’t seem to fit their purposes when compared to a canned cocktail that could be enjoyed while on the go, traveling or adventuring.

  Oregon-based 503 Distilling offers their canned Mt. Hood Old Fashioned, a blend of their rye whiskey, hazelnut bitters and maple syrup. This canned cocktail follows their first release, the Wicked Mule, along with other offerings—Blood Orange Greyhound, La Vida Mocha, Five-O-Tea and Huckleberry Lemonade.

  For a Brazilian twist on the Old Fashioned, Novo Fogo is launching a Brazilian Old Fashioned Highball hybrid that features tropical flavors of orange and vanilla. Their initial foray into the canned cocktail market was their Sparkling Caipirinha, a canned version of Brazil’s national cocktail available in three flavors found across the Brazilian food and drink spectrum—lime, passion fruit and mango.

  Finally, for consumers looking to savor a hot, after-dinner hard coffee that’s easy to make, Cask and Kettle produces small-batch hard coffees in flavors such as Irish, Mint Patty, Hot Blonde or Mexican Coffee, and a Spiked Cider in a k-pod. The k-pods, packaged and distilled by Temper-ance Distilling in Temperance, Michigan, contain liquid distilled spirits, concentrated coffee and flavorings, and can be placed into any pod home brewing system or poured into hot or iced water.