Barrels & Racking:

Modern Systems, Historic Preservation and Refurbished Options Producing Optimal Results

By: Cheryl Gray

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

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

Space to Breathe

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

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

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

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

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

Tradition and Preservation

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

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

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

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

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

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

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

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

Reusing Resources

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

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

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

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

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

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

Mixology Mishaps:

How To Turn Negative Online Reviews into Successful Sales

By: Chris Mulvaney, President (CMDS)

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

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

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

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

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

Create a Game Plan

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

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

  Here are some game plan directives to put into place:

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

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

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

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

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

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

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

Leverage Other Business’s Negative Experiences

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

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

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

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

●    Want a bigger pour for the price.

●    Employees are rude/non-compliant with safety.

●    Tour was longer than it stated.

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

●    Not enough offerings/limited selection.

●    No Flight Layout (for breweries).

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The Last Gulp

To recap:

●   Create a uniformed GAMEPLAN.

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

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

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

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

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

Exploring Brewing & Astronomy with John Harris of Ecliptic Brewing

By: Becky Garrison

Upon meeting John Harris, one might not realize that this soft-spoken man is, in fact, a legend in the world of craft beer – not to mention a seasoned astronomer. Chris Crabb, Director and Or-ganizer of the Oregon Brewers Festival, calls him “a warm, wonderful soul” and says she is “honored to call him a friend.”

  Harris has been a seminal figure in the Oregon craft brewing scene for over thirty years. “He’s the only brewer that has brewed a beer for every single Oregon Brewers Festival, representing three different breweries during its 32-year run,” says Crabb. “The festival often coincides with John’s birthday, so he has one of the largest birthday parties thrown in his honor every year.”

  Steven Shomler, author and culinary storyteller, reflects on Harris’ stellar course. “John has gone from home brewing and following Fred Eckhardt’s book ‘A Treatise on Lager Beers,’ to apply-ing for his first professional brewing job at the Hillsdale Brewpub, to being the very first profes-sional brewer in Bend, Oregon, to running his own successful venture: Ecliptic Brewing.”

  Harris’ interest in home brewing began in the early 1980s, just as microbreweries started popping up in Washington State and Oregon. For over thirty years, he worked as a professional brewer, working with some of the Pacific Northwest’s biggest brands. While working with the McMenamins brothers, he was the first brewer to make Hammerhead in its all-grain formulation. His accomplishments at Deschutes Brewery include devising the recipes for their Black Butte Porter, Mirror Pond Pale Ale and Obsidian Stout beers. During his 20- years at Full Sail Brewery, he ran their Brewer’s Reserve program, where his formulations included Slipknot, Hop Pur-suit and the Sunspot Series. After the brewery eliminated Brewer’s Reserve in 2012, Harris felt the need to move on.

  So, he found a former body shop located at 825 North Cook Street in the Mississippi district of  Portland near Widmer Brothers Brewery. He oversaw the shop’s transformation into a 15-barrel brewery, replete with a taproom featuring a 145-seat restaurant and a patio in the parking lot. In October 2012, Ecliptic Brewing was incorporated, and then, on October 20, 2013, it opened for business.

  Harris knew that his brewery needed to have an astronomy name and theme. His interest in as-tronomy was rekindled when he saw a Sky and Telescope magazine on an airport newsstand while traveling for work. He bought a copy, and the astronomy bug was back.

  When asked what prompted his interest in astronomy, Harris points to his uncle, who gave him a telescope when he was a child. From there, astronomy became a hobby that he got in and out of over the years. A year after spotting this magazine at the airport, Harris bought a new and bigger telescope and began going to star parties.

  Initially, Harris had another working name for his brewery, but it was already taken. The Eclip-tic, the astronomical term for the plane of Earth’s orbit around the sun, kept popping up and eventually became the name for the brewery. A 25×25 foot mural of an Ecliptic plane, created by Loey Hargrove, graces the restaurant’s bar wall. Spaced themed label art, marketing catchphrases like “Pour some space in your face,” and signature beers such as Ecliptic Starburst IPA and Phaser Hazy IPA give the feel of a brewery founded by someone with their eyes clearly looking upward at the stars.

  “In hindsight, there is no better name than Ecliptic, as this ties into our seasonal beer and food we make here at our brewery and restaurant, as we go around the sun on planet earth,” Harris says.

Signature and Seasonal Beers

  Ecliptic’s beer names represent more of a marketing decision than coordinating a release follow-ing the seasons. For example, during the 2017 solar eclipse, they got some national press for hosting eclipse-themed events and releasing their Chromosphere Blonde Ale. This special release eclipse beer was made using Amarillo and Cascade Hops and had a citrus nose and flavors with a light yellow color that resembled the summer sun.

  For the 2019 Oregon Brewers Festival, they brewed LIGO Key Lime Gose. This beer, named after the world’s largest gravitational wave observatory, featured Ecliptic’s house lactobacillus strain and key lime purée. During this festival, Ecliptic was selected as the host for the 13th an-nual Oregon Brewer’s Brunch and Parade, and LIGO Key Lime Gose was the first official keg tapped at this event. OBF was canceled in 2020 and 2021 due to the Covid 19 pandemic, with plans to resume the festival July 27-30, 2022.

  Their other Cosmic Collaborations included Blood of Jupiter, a Belgian-style Tripel. They teamed with Umpqua Valley’s TeSóAria Winery, with the base beer brewed by Ecliptic, and then aged in Sangiovese wine barrels furnished by TeSóAria.

  Customer demand for IPAs has led to their signature Ecliptic Starburst IPA, as well as Vega IPA and Phaser Hazy IPA. However, Harris’ creativity includes brewing darker beers and sour beers, which are appearing in greater frequency on their taproom menu.

  Most patrons frequent Ecliptic for the craft beers and space vibe. However, for those bent toward astronomy, Ecliptic hosts occasional star gazing events on their patio for amateur astronomers. Their menu also describes the meaning behind names like Capella (a bright star in the constella-tion Auriga), Phobos (the Martian moon that circles the red planet), and Oort (the mysterious re-gion of our solar system that breeds comets). In addition, they occasionally offer astronomy triv-ia via their social media channels.

Pairing Food and Beer According to the Seasons

  While pairing Oregon’s wines with locally sourced food has always been considered standard practice in the Portland dining scene, beer tends to be treated as a stand-alone beverage.

  “Portland is such a foodie town, and yet there was no brewery that was taking food seriously,” Harris says.

  From Ecliptic’s inception, Harris wanted to create a brewpub that could be on the list of Port-land’s 100 best restaurants. Their menu continues to play off Ecliptic’s name, emphasizing sea-sonal ingredients and beers.

  They continue to host occasional food and beer pairings, such as the Cosmic Brunch, held as part of their “5 Beers for 5 Years” series, commemorating the brewery’s fifth trip around the sun. At this brunch, held on February 3, 2019, Harris and Brooklyn Brewery’s Brewmaster, Garrett Oli-ver, released their Tangerine Farmhouse Ale collaboration along with a five-course meal and several beers from each brewery. They gave away signed bottles of the collaboration beer to each attendee. Other similar collaborative dinners include Firestone Walker Brewing Company (Hazy Double IPA), Breakside Brewery (Nectarine Sour Ale), Bell’s Brewery (Juicy IPA) and Russian River Brewing Company (Belgian-Style Hoppy Golden Ale).

Working at Ecliptic Brewing

  Harris’s history and reputation in the beer industry enabled him to bring on employees like sales manager Erin Grey Kemplin. She met Harris when she was the on-premise rep for Full Sail’s distributor. During that time, she got to know Harris.

  “I was able to not only drink John’s creations but also get to know him as a friend,” Kemplin says. After Ecliptic opened, she frequented the brewery nearly every week. “When he decided to build out a sales department and came to me about the role, I knew the answer had to be yes.”

  She stays at Ecliptic due to the delicious beer, the staff and a boss like Harris. “He is the kind of boss that will support you through thick and thin, but also help you figure out solutions when you are stuck without talking down to you.”

  Like Kemplin, Alisha Goddard, Ecliptic’s human resources and business manager, got to know Harris during his tenure at Full Sail, where she felt drawn to his friendly and fun energy. When she heard of an opportunity six months after Ecliptic opened, she jumped at it. “I had worked at a large operation for a while and wanted to be a part of something smaller that felt more tangible and community-oriented,” Goddard says.

Looking into the Future 

  During the global pandemic, Ecliptic Brewing, like other Portland food and drink establishments, found themselves at a crossroads. When possible, they would offer indoor seating, outdoor seat-ing on their large patio, with beer and food-to-go.

  Pre-pandemic, the brewery hosted a couple of events each month, usually celebrating the release of a new beer. On October 1, 2020, they hosted their first event since March 2020, when they teamed with the Oregon Museum of Science and Industry to offer a sold-out Star Party. OMSI set up a large telescope on a projector, showcased various celestial bodies on the screen and handed out different learning materials. This social distanced event took place outside with all tickets pre-sold. During the event, people could order food and beer from their regular menu along with a special dessert for all attendees.

  Moving forward, Shomler sees good things for Harris and Ecliptic Brewing. “John continues to sharpen his own skills set, and he has the foundational capabilities needed to have a successful brewery: the ability to brew great beer, lead a terrific team and successfully run his business. Many breweries fail due to deficiencies in one or more of these three mission-critical areas of expertise.”

  Currently, Ecliptic’s beers are available in Washington, Oregon, Idaho, Colorado, North Caroli-na, Canada and Japan. To learn more about Ecliptic Brewing, go to http://eclipticbrewing.com/

2021 Beverage Trends

By: Tracey L. Kelley

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

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

So—What’s New?

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

People are Eager for To-go and Online Options

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

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

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

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

Non-standard Products Continue to Rise

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

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

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

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

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

Health is Front and Center

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

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

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

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

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

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

Value and Safety Still Prevail

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

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

Up Your Consistency and Repeatability Game With Quality Testers and Meters

By: Gerald Dlubala

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

Quality Control and Analysis at Your Fingertips

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

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

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

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

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

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

All in for Peace of Mind

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

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

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

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

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

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

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

Quality H2O: Good Water Equals Good Beer

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

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

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

Brix and pH Meters: A Brewer’s Best Friend

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

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

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

Steam & Water Flow Measurement: Going with the Flow

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

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

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

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

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

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

How Your Intellectual Property Can Make or Break a Merger

By: Ashley Earle, Attorney, Dinsmore & Shohl

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

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

What Is IP?

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

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

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

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

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

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

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

What IP Do I (and They) Have?

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

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

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

Do Both Sides Actually Own Their IP?

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

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

What Are We Agreeing to In the Deal Terms?

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

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

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

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

Were Things Done Right with the IP by Both Sides?

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

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

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

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

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

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

Brewing Social Media Success:

How to Use the ‘Gram to Maximize Your Craft Beverage Brand  

By: Chris Mulvaney, President (CMDS)

What three things do Tito’s, Blue Chair Bay Rum and Trillium Brewing Company have in common?  All three have mastered the ‘gram game and have boosted their brand success by putting out a consistent cross-formula of brand content, brand awareness and maximizing audience engagement across the ever-growing social media platform.

  Whether you are a craft brewer, startup spirit producer or global drinks company, your social media presence should be at the top of your priority list. But how exactly can crafters use Instagram to grow their business?

  Instagram is a visually appealing social media platform. In recent years, it has started to dominate Facebook in that it is not as overcrowded and expensive. The beauty of Instagram is that brands can still establish an organic relationship with their followers and can develop brand personas, becoming known for a certain tone, content and style. They can build their brand immensely just by being an active user. Also, the influencer market has never been so powerful for brand awareness.

Instagram Strategy

  Once you get a grasp of the platform, then you must define your social media strategy to gain the right followers and maximize engagement.

   This should include:

•   Increasing brand awareness.

•   Driving website traffic.

•   Increasing website engagement to generate leads and drive sales.

•   Increasing customer retention, engagement, and followers.

  How can a brand stand out in an increasingly competitive market?

•   Quality products, first and foremost.

•   Great marketing.

  After that, tell your brand story through photos, partnerships, video and human interaction. Think about what separates your product from others in the market. This isn’t something that’s achieved by one post, but over time, and means connecting your product to something much wider than the drink itself.

  For example, Mexican brand, Corona, understands the appeal of their beverage isn’t just the beer itself. A Corona and lime brings to mind vacations, beaches, relaxation and sun.

  They’ve fully embraced this as their brand, tying the image of plunging a fresh lime into a cold Corona to diving headfirst into the waters of a clear blue ocean.

Organic Media vs. Paid Media

  In the past, the goal of most marketers on Instagram tended towards growing a big following, then continuously publishing content that’s relevant to their brand and audience. One important point to realize, however, is that just because you have 1000 followers doesn’t mean every time you post all 1000 of them will see that post.

  In fact, the reality is a much smaller percentage of them will ever see your post and that’s where the term “organic reach” comes in.

Organic

  One of the most important things to understand about social media marketing is that the way companies can succeed on social media will be entirely dependent on whether they can create an organic experience for users.

  Organic reach determines how many of your followers will see your post without you paying.

This concept of organic reach is prevalent on Instagram since the algorithms used to determine who will see your content at any given time are based primarily on engagement.

  Tips to Get More Organic Reach:

•    Feed your audience with more value.

•    Upload at least two posts a day.

•    Make use of all the features (posts, stories, comments, hashtags).

•    Use attention-grabbing headlines.

•    Use paid sites like Sprout Social to understand the industry atmosphere and create an ongoing dialogue with your audience.

Paid Distribution

  Due to changes in organic reach over the years, companies have been forced to rethink their social media strategies, and in many cases begin exploring other avenues to reach their users on social media, specifically through paid distribution.

  Utilizing paid channels has a number of benefits because it can target users based on demographic information, behavior and interests. Because of this, marketers are able to drill down to specific audiences.

Seven Steps to Success

  Gaining followers and engagement isn’t about simply posting once a week and hoping for the best. In fact, a successful strategy on Instagram should include concrete goals, an ongoing content calendar, a scientific approach to who you’re trying to reach and how many people you expect to interact with.

  The following are seven important steps to grow your brand on Instagram.

1.  Be consistent:   It’s important to define a core strategy for your brand. It should be consistent across all channels and the narrative should be easy to follow. You’ll need to balance product content, campaign content and brand content to be most effective.

       How to maximize consistency on the Instagram platform:

•   Post stories often.

•   Like and comment on posts.

•   Run a contest.

•   Post engaging captions.

•   Offer free advice or information.

•   Post during active hours.

•   Use Instagram ads (paid distribution).

•   Have a strong visual brand strategy.

2.  Use clever alcohol hashtags:  Using clever alcohol-related hashtags can help get your brand trending online or inspire a sense of community with your customers.

        Studies have shown the optimal number of hashtags to use in Instagram consistently is seven. However, even more important is to define your hashtags, include them on packaging and don’t change them too often to make sure fans can refer to you easily.

3.  Use Influencers:   The influencer market has never been so powerful. There are hiring sites for influencers that will allow you to enhance your brand and vision through them. It’s a great way to promote engagement because it boosts brand awareness fast and increases your potential to go viral.

4.  Keep the “social” in social media:  A great way to inspire your fans is to use social media to inspire real world engagement. Your brand will get the most out of social media by catering to the interactive experience. It’s important to be part of the conversation around social events which will resonate with your market – both in terms of pre-planned campaigns and via reactive content.

       Just having a social media account is not enough. Successful brewing and spirit brands actively encourage their fans to engage with their accounts. Many have received some serious engagement by re-posting user generated photos.

       Whether you’re sponsoring a national event, or you can be reactive in a more local way, providing up-to-date content and being part of the conversation will help to keep your brand relevant.

5.  Offer a Backstage Pass:  Take your followers behind the scenes. Let your audience peek behind the curtain and see how their favorite drinks are made. Post photos of the start-up days, of the staff living life and having real experiences.

6.  Connect to a Cause:  Just as social media users don’t only care about likes and clicks, drinkers don’t care solely about their alcohol. More and more, consumers care about the ethics behind the products they’re buying. Remember, they are buying a brand.

       For example, New Belgium Brewing Company put meaning behind their message with their #FindingCommonGround campaign, which not only connects their outdoorsy aesthetic brand to a public land cause, but raised over $250,000 for charity.

        It’s worth the investment, on multiple levels, to put some of your efforts into giving back.

7.  Partner with other brands:   A drink is better with friends. Likewise, a brand is better in a partnership.

       Consider doubling up your power for promotions with a complimentary brand. Partnerships are especially good on Instagram for giveaways, allowing you to expand your offer and reach two different audiences.

       Make sure to find a brand aligned with your goals, and of similar size to get maximum value from a partnership.

Don’t Make These Common Instagram Mistakes

  Common mistakes brands can make on Instagram can hurt them exponentially. Here are some important ones to avoid:

•    Sharing more reposts than original content.

•    Taking too long to respond to comments.

•    Favoring quantity over quality.

•    Misusing hashtags.

•    Buying likes and fake followers.

•    Not paying attention to analytics.

Recap

Craft beverage companies have a product that is in demand, but they are working in an increasingly competitive market. Digital marketing allows them to stay ahead of the game through creative branding and audience engagement.

As a recap, here are some main social media tips as discussed above:

•    Get to know how the Instagram platform works.

•    Define your social media strategy.

•    Tell your brand story.

•    Utilize organic search and paid distribution.

•    Be consistent.

•    Use hashtags.

•    Use influencers.

•    Inspire real world engagement.

•    Take your followers behind the scenes.

•    Connect to a cause.

•    Partner with other brands.

•    Keep it going; don’t stop!

The Last Gulp

  If craft beverage companies hope to engage consumers and boost their sales in this competitive market, they have to adopt a social media strategy that ensures success. While there is no cookie-cutter formula to success on Instagram, there is a pattern that works across the platform if utilized properly.

  The realness is in the engagement and knowing how to maximize your followers and their engagement. So keep thinking: just how can you brew up a social media campaign as unique as your beverage?

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

A Trend No Longer, Zero-Proof Spirits Rise to Any Occasion

By: Tracey L. Kelley

Crafting with spirits is an art that provides endless possibilities for the maker and mixologist alike. But the growing demand for spirit alternatives also demonstrates there are even greater opportunities to present flavor complexity and style.

  Whether through herbal tonics such as those found at Dr. Andrew Weil’s True Food Kitchens throughout the U.S.; spirits “for those partaking” and non-spirits “for the whole family” at Vena’s Fizz House in Portland, Maine; special juice and botanical potions at Shine Restaurant in Boulder, Colorado; or booze-free craft cocktails at the Modernist in San Antonio, Texas; producers of zero-proof options seek to expand the marketplace to allow consumers a bounty of choice.

  “There’s a knee-jerk reaction in some people when they hear about spirit alternatives. I get it — I love spirits too! I promise we’re not here for your guns,” Marcus Sakey, founding partner of Ritual Zero Proof in Chicago, told Beverage Master Magazine. “Our products aren’t meant to replace liquor. It’s a complement, a way to enjoy when you’re driving, dieting, training, making a baby, looking for balance or just have [stuff] to do tomorrow. The need goes way beyond the sober-curious. It’s like almond milk or the Impossible Burger — 90% of purchasers aren’t vegetarian or vegan. People want options, ways to mark a moment without the alcohol or calories.” Ritual produces high-rated gin, tequila and whiskey alternatives.

Tapping Into What Consumers Want

  As Sakey points out, there are numerous reasons why someone might choose not to have alcohol on a particular day, but frequently don’t have alternatives when going out with friends or wanting something to accompany dinner. So while movements such as Dry January or Sober October might have planted the initial seeds for alcohol-free selections, abstinence isn’t the only reason for their popularity.

  “We’ve received great support and encouragement from the sober-curious movement since day one, but we’re seeing the trends becoming habits amongst the 75% of drinkers who switch between alcoholic and non-alcoholic drinks,” said Mark Livings, co-founder and CEO of Lyre’s Non-Alcoholic Spirits, a London-based company with production facilities there as well as Melbourne, Australia and Montreal, Canada.

  “Over time, people are reducing consumption, so for a venue to retain patronage, it’s important to have a quality range available when a drinker inevitably looks for a non-alcoholic option.” Lyre’s extensive award-winning non-alcoholic spirit line includes American Malt, Dry London Spirit, Italian Orange, Dark Cane, Apéritif Rosso, Coffee Originale, White Cane, Amaretti, Italian Spritz, Orange Sec, Spiced Cane and Absinthe.

  Formerly the bar director of chef David Chang’s famous Momofuku Restaurant Group and mixologist for the speakeasy PDT in New York City, John deBary, creator and CEO of Proteau, wanted to solve another problem for customers. “Drinks that didn’t rely on alcohol were always a challenge. Drinkers tended to think of overly sweet and simple ‘mocktails,’ and finding zero-proof drinks that paired well with food was almost impossible.” Also the author of the cocktail book Drink What You Want, deBary crafted Ludlow Red and Rivington Spritz as ready-to-drink, zero-proof botanical options.

  “From a technical standpoint, zero-proof drinks are a fun challenge to a bartender because alcohol, since it’s a solvent, is a great base for flavors. Plus, we have access to thousands of uniquely-flavored products: gin, whiskey, liqueurs, fortified wines – to name a few,” he said. “These challenges are what led me to create Proteau as a way to test my abilities as a bartender/mixologist, and to find a way to create delicious beverages that everyone — not just alcohol drinkers — could enjoy.”

Intent Focuses on Taste and Versatility

  “A well-made cocktail is about taste and mood as much as it’s about alcohol, maybe more so. I wanted to introduce some balance to my bar cart; to be able to enjoy evening cocktails and a morning workout,” Sakey said. “Echoing the taste, smell and mouthfeel of spirits was incredibly difficult. Distillation turned out to be a rabbit hole — the cost was impractical, but more than that, it wasn’t possible to get the flavors right while still keeping it truly non-alcoholic.”

  Sakey said Ritual’s solution was to treat the process like cooking, building upward and layering tastes with quality ingredients such as all-natural botanicals. “The trickiest part was trying to replicate the kick of spirits. Over 500 iterations, we crafted a complex blend of ‘mouth-punch’ botanical elements — some spice, some cooling, some tingle, a few exciting additions I’ll keep under my hat — that work together to trick your taste buds,” he said.

  “Throughout the process, we worked closely with some of Chicago’s best mixologists and chefs. After more than a year of development, one of them said, ‘You know, in a cocktail, I’m not sure most people would be able to tell the difference.’ That was when I knew we had it,” Sakey said. In 2020, the industry-standard Beverage Testing Institute gave all of Ritual’s products three top honors and ranked its Tequila Alternative as the highest-rated non-alcoholic spirit in the world. It also has plans to roll out another spirit alternative in early 2021.

  Livings’ interest in zero-proof options evolved from his personal wellness journey, combined with an awareness of how friends’ and colleagues’ deliberate drinking choices. “They all expressed a common problem: they missed the drinks they knew and loved, and they weren’t impressed with the available alternatives.”

  With a long career in the beverage industry, he had the resources to pull together a team of bar staff, liquor marketers and liquor salespeople. “We figured that if anyone was going to change the way the world drinks, it should be a group of people who have plenty of drinking experience and would never compromise on taste. The big breakthrough was the ‘ah-ha’ that you didn’t have to take the alcohol out of a spirit product to produce a non-alcoholic spirit.”

  The single most important challenge, Livings said, was to provide true non-alcoholic versions of each classic spirit. “The flavor, aroma and appearance of each Lyre’s variant had to meet our high standards and basic test of, ‘Does it feel like I’m having a drink with booze in it?’” he said. “Over two years were invested in breaking apart flavors of the classics. It was very important that each was as close as physically possible to the classic spirits we are paying homage to. We don’t distill our products, as it’s not required when you craft the flavors using essences, extracts and distillates on a non-alcoholic base.”

  Proteau isn’t distilled either, as deBary chooses instead to blend a proprietary mix of botanical extractions with clarified fruit and artisanal vinegar for a low-sugar beverage. “For me, the eureka moment was when I sampled test batches with friends and colleagues, and they didn’t believe there wasn’t alcohol in the recipes. This is when it really dawned on me that the sensation of drinking a complex, intellectually-engaging drink wasn’t reliant on alcohol, and if we could disentangle that, we could open up a whole new world for people.”

Crafting a Solid Future

  Data points to a consistent rise for hand-crafted or small-batch zero-proof spirits, even if on-premises sales are skewed by 2020 pandemic repercussions. Future Market Insights in London indicate key demographics for spirit alternatives — considered part of the functional beverage market — includes 18 to 24 and 25 to 39, with product growth projections of nearly 3% each year for the next five as individuals seek “a multi-sensory drinking experience.” So innovation in the bottle must extend into well-positioned partnerships for marketing and promotion, and our makers know this all too well.

  “Again, people want options. This isn’t just me saying it — sales data bears it out,” Sakey said. “Across 90 days, we have a reorder rate of greater than 40% from major players like Binny’s Beverage Depot, Total Wine & More and ABC Fine Wines. If you extend the period to 120 days, it jumps to 70%. Better still, because Ritual Zero Proof is an ‘and’ product, it leads to higher sales, while serving a set of customers that liquor retailers often couldn’t otherwise capture.”

  Sakey and his team rely on integrated efforts to attract attention. “We’re cocktail aficionados, both leaded and unleaded, and so we love to work closely with mixologists. Some of our favorite Ritual recipes, like The Green Go-Go, have been created by artists like Carley Gaskin [of Hospitality 201 in Chicago], who was selected as The World’s Most Imaginative Bartender in 2018,” Sakey said. “But one challenge we often find is that retailers aren’t sure how to place spirit alternatives. We work closely with them, sharing best practices and providing POS materials. By showcasing a set, including components and mixers to create no- and low-ABV beverages, our partners see notably higher cart rings. It’s a win all around.”

  Livings said the company produces much faster now due to experience and “what the ‘rules’ are of non-alcoholic flavor architecture.” This enables the brand to span the world, broadcasting “an unparalleled range of drinks that you can make with Lyre’s. We have over 20 brand ambassadors, all classically-trained bartenders, so their expertise is the perfect base to help educate and collaborate with other bar staff and mixologists,” he said. “We’ve also worked closely with influencers, bloggers and passionate supporters.”

  In keeping with virtual outreach as venues’ occupancy ebbs and flows, Livings said the company offers one-on-one mixology classes through video chat programs. “When you purchase Lyre’s via our e-commerce site, we set up a private, 15-minute class with one of our brand ambassadors to demonstrate how to make delicious non-alcoholic cocktails at home,” he said. “It’s a unique offering, and we love the opportunity it gives us to meet our Lyre’s drinkers.”

  The primary message deBary reinforces with customers is “they don’t need to lift a finger to enjoy Proteau as intended.” But he trusts what his colleagues can do to provide a unique drinking experience. “Bartenders are naturally creative and experimental people, and we’ve been really happy with how they’ve used Proteau in their recipes and will continue to support that.”

  He also understands the unique value of providing people with a range of selections to fit their desires. “When I was bar director for Momofuku, and we would expand the non-alcoholic drink options at one of our restaurants, we noticed an overall increase in beverage sales,” he said. “The expanded options didn’t cannibalize from any other category and showed us, in real numbers, that we were reaching people who had previously been left out of the conversation. Accessibility is the core of hospitality, and it’s not just the right thing to do; it’s also great for business.”

Raising Capital for Craft Spirits Through Crowdfunding

By: Becky Garrison

Since its founding in 2013, Seattle-based Copperworks Distilling Company developed an award-winning portfolio of spirits with accolades such as the 2018 Best Distillery of the Year award from the American Distillery Institute. Yet, according to Jason Parker, Co-Founder and Presi-dent, they found themselves at a crossroads in growing their distillery last year. Even though they had more than 260 barrels of whiskey aging in inventory, the current demand for their American Single Malt whiskey exceeded their supply of mature whiskey.

  “The only way to win sales in the whiskey market is to have whiskey to sell,” Parker told Beverage Master Magazine. “If we are only growing through cash flow generated by vodka, gin and a little bit of whiskey sales, we won’t have the whiskey to compete in the market against those businesses who received capital investments to produce whiskey. In essence, we must produce whiskey faster than our current cash flow will allow.” 

  Rather than resort to traditional ways of generating capital, they wanted to explore a way to ex-pand their business that would get their friends, family, customers and other supporters involved as brand ambassadors. “We wanted to give them an opportunity to own a little piece of the work and be with us as we grow,” said Parker. 

Choosing Equity Crowdfunding

  Copperworks decided to raise money via equity crowdfunding through the WeFunder website. In Copperworks’ estimation, this approach enables individuals to become part-owners of a privately held company by trading capital for equity shares. This method of generating capital became available in 2016 with the passage of a new law called “Regulation Crowdfunding.” This shift made it legal for anyone to invest small amounts of money in startups.

  Copperworks chose equity crowdfunding over more established crowdfunding platforms like Kickstarter, Indigogo or GoFundMe because, with equity crowdfunding, a company issues equi-ty, such as shares of company stock, to participating investors. A company like Copperworks may also choose to offer perks, but the major incentive is the opportunity to become shareholders in the company.

  In comparison, traditional crowdfunding is more rewardsbased, whereby those who contribute to the campaign receive a perk, such as a discount or an advance copy of the product, but they have no equity in the company. Furthermore, a traditional crowdfunding campaign often offers their products at a discount to generate interest. Should the campaign take off, companies can find themselves unable to meet market demand at this low price point.

  According to Parker, a key advantage of equity crowdfunding is the company’s opportunity to utilize its investors as brand ambassadors. While this component of Copperworks’ strategy has been put on hold due to COVID-19, they are currently in the process of building a brand ambas-sador kit for their investors. In this kit, investors will be given the details of how to approach a restaurant, bar, grocery store or liquor store on behalf of Copperworks.

Challenges of Using Equity Crowdfunding

  Parker acknowledges the need for a distillery to ascertain if equity crowdfunding is the right ap-proach. For example, this approach to raising funds may not work for a business that has only been around for a year or less and has yet to build up a loyal following. “Equity fundraising is a good thing when you’re mature enough for the company to attract the appropriate investors for the valuation,” he said.

  From a company’s point of view, equity crowdfunding requires more upfront costs and financial discipline. The company’s records need to be reviewed professionally, an expensive process that took Copperworks three months to complete. In addition, WeFunder takes 7% of the funds raised, unlike a bank loan where one receives the entire amount upfront and then pays interest over time. Depending on the terms of a loan, a company may pay more in interest through a traditional loan. However, for those companies needing the full amount upfront, a bank loan may be their best option.

  Also, with equity crowdfunding, Copperworks had to be totally transparent with their financials, a process that included having this information readily available for public viewing. For Parker, this transparency fits in with their business model. “We believe transparency is one of the things missing in businesses today, so we want to model that behavior.” In the issue of transparency, they chose to share with their investors why they needed to raise money and how they intended to use these funds.

Promoting and Implementing the Equity Fundraising Campaign

  Copperworks promoted their campaign through their mailing list of 12,000 individuals. In addi-tion, they reached out to the 3,600 folks who liked their Facebook page because they had a high rate of customer engagement on this platform. They were also featured for five weeks in the American Distilling Institute newsletter. Their campaign, which ran from the end of February to April 2020, netted a total of 409 investors and $776,480 in funds.

  Parker admits to the challenges of raising funds right as COVID-19 began impacting the econo-my starting in mid-February. “It’s not very easy to ask people to spend money on a company when they may not have a job, their life savings may be losing 30% of its value, and they don’t know who around them is even going to be alive in a few months.”

  However, he said that since Copperworks had been around for a long time, many people emerged who really liked the company and their products and were looking to support something they cared about. 

  Regardless of the amount of their investment, each investor receives an annual report along with an invitation to every quarterly meeting. For those who invested $1,000, they get 10% off all Copperworks goods for life. Other perks were offered to those investing at higher increments, such as an offer to pick a single cask whiskey, a free event rental or an invitation to be on the board of directors.

  As per the SEC regulations, Copperworks disclosed to their investors the risks associated with capital works. While some of the risks noted are associated with investing in any company, others are specific to the distilled spirits market or Copperworks in particular. For example, the cur-rent distilled spirits market growth could slow or stop in the future. Along those lines, due to the threetier distribution system in the alcohol industry mandated by U.S. law, Copperworks is reli-ant on distribution companies. The distribution system has experienced consolidation in recent years, and should this consolidation continue, distilleries may face difficulty in expanding the distribution of their products.

Outcome of Equity Fundraising Campaign

  Copperworks successfully raised enough money to continue production during the COVID-19 shutdown and produce whiskey at their all-time maximum rate. All employees kept full-time hours, even though the tasting room was (and remains) closed. Therefore, the distillery could de-vote some of its resources to producing hand sanitizer, a product badly needed at the start of the pandemic. 

  Even better than simply raising money, which a bank loan could have accomplished, Copper-works was able to fully engage the support of their loyal fans. Customer engagement through social media, email and quarterly calls increased the opportunity for Copperworks to share their story and their customers to become brand ambassadors. New customer acquisition, which is much more difficult while the Copperworks tasting room is closed, increased through word-of-mouth, and online sales increased due to these outreach efforts.

  As Copperworks looks to expand their production area and event space, they have solicited their new investors’ network to help them find even more opportunities to grow their business. Copperworks is truly building an army of brand ambassadors and getting new talent and ideas through the use of regulation crowdfunding.

Continuously Improving Your Incentive Program

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

The first years after launching an incentive program are an exciting time for craft beer producers: supply chain trading partners, drawn by the excitement of new promotions and an improved channel partner experience, are more responsive, more motivated and more likely to recommend the brand’s products to restaurants and retailers. During this time, craft beer producers often experience a period of rapid sales growth or improvement in other KPIs the program was designed to target, such as improved partner data profiles or increased referral business. The incentive program’s ROI grows exponentially.

  However, often after 12-30 months, growth begins to stagnate and the ROI curve starts to flatten. If left unaddressed once an incentive program’s novelty starts wearing off and supply chain trading partners become habituated to the program’s value proposition, the incentive program’s ROI may start to decline, leaving craft beer producers scrambling to find ways to replicate the program’s success.

  The good news is that by planning ahead, craft beer producers can anticipate this drop off in interest level and continuously improve their incentive program in order to sustain a competitive advantage in their channel.

Keeping Incentive Programs Fresh

(and Profitable!)

  In order to stay relevant, a channel incentive program has to be able to evolve with the interests of its participants, scale its value proposition over time and respond rapidly to the tactics of the competition. Below are several factors that craft beer producers can focus on in order to continue to drive ROI once program growth begins to stagnate:

•  Evolving incentive program technology.

•  Incorporating elements of gamification.

•  Adding new, richer reward-earning opportunities.

•  Personalizing brand interactions to build loyalty.

•  Re-launching the program with updated features and branding.

  Ideally¬, these are all elements that craft beer producers will consider from the inception of the program, with plans for program expansion at certain intervals. However, these factors can also be incorporated to bring new life to existing programs.

Evolving Incentive Program Technology

  Today, incentive programs are a technology platform, and craft beer producers should be as mindful in selecting incentive program technology as they are in selecting any B2B software platform. From an administrative standpoint, this means choosing an incentive platform that integrates with existing CRMs and other business software and provides streamlined admin tools and generates detailed reports on engagement and ROI.

  However, perhaps more importantly, craft beer producers should focus on selecting incentive software that is fully supported and will be continuously updated to improve the user experience for their supply chain trading partners. More and more, B2B customers expect a seamless B2C-style user experience. Partners will be less likely to engage with a rewards program that uses stale, outdated software, no matter how exciting the reward offering.

  Additionally, agility is key. Craft beer producers should look for incentive software that allows them to quickly go to market, adapt to the tactics of the competition and launch new promotions. These factors will offer an edge when it comes to maintaining engagement throughout the lifetime of their program.

Incorporating Elements of Gamification

  Gamification is the use of game-like elements – such as points-scoring, interactive leaderboards and other competitive components – to increase engagement with a web-based application, such as an incentive program. Gamification is a powerful tool that supply chain trading partners already seek out in their day-to-day lives, from collecting likes on their Facebook page to scoring achievements on Peloton bikes.

  When interest in the program begins to stagnate several years after launch, adding gamification features can give the program new life. Interactive trivia, spin-to-wins, badges and achievements, personalized leaderboards and limited-time point bonuses make the program more compelling and can give a sustainable boost to the program’s effectiveness over time. Additionally, by not relying strictly on reward value to drive engagement, craft beer producers can help lower program costs to increase their ROI.

Adding New, Richer

Reward-Earning Opportunities

  As mentioned earlier, one of the reasons an incentive program can lose its effectiveness overtime is that participants become habituated to the program’s value proposition. Top performing supply chain trading partners may have already redeemed for their most coveted rewards and find themselves with more points than they know what to do with. The competition may have launched their own reward program with comparable, or even more compelling, rewards.

  It’s up to craft beer producers to constantly up the ante with their program’s value proposition. For instance, launching a points-based merchandise reward program alongside an existing debit or gift card program will offer new value for participants. Elevate a points-based program by offering top performers a concierge service to redeem for custom rewards – using their points to buy a new truck, renovate their home or pay for their child’s college tuition will personalize the reward experience and boost the program’s value proposition in a way the competition will struggle to match.

  Additionally, incentive travel promotions can be added onto any program type, giving craft beer producers an opportunity to connect with their supply chain trading partners on a deeply personal level. Given recent restrictions, the demand for incentive travel is projected to be particularly high once it is deemed safer.

  If minimizing rewards cost is a concern, try setting higher qualification thresholds for these more exclusive reward opportunities. Doing so can also help tap into supply chain trading partners’ competitive drive, keeping them more engaged as they compete for a limited number of higher tier rewards.

Personalizing Brand Interactions

to Build Loyalty

  In their early stages, incentive programs are typically geared toward growth. However, if well designed, the program will be able to convert that initial interest and motivation into brand loyalty over time. Loyalty is about more than rewards; rewards appeal to self-interest while loyalty is rooted in creating mutual interest. Craft beer producers can create this loyalty by using their incentive program to provide a highly personalized experience and to help their channel partners become more effective salespeople.

  This personalization should extend through every phase of the incentive program, from designing program communication to be relevant to each segment of their channel partners to basing reward selection on participant lifestyle and interests. Craft beer producer can use engagement metrics from their incentive program to identify which of their supply chain trading partners have a high level of buy-in and which of their partners might need a little more help. They can provide enablement to their partners by providing online courses and certifications and using their incentive program as a platform to educate partners on their brand and product lines, equipping them to more effectively sell their products.

  By using personalization and focusing on partner experience, craft beer producers can build loyalty with their supply chain trading partners in ways that make extrinsic rewards less important. This makes trading partners drastically less likely to lose interest in the program.

Re-Launching the Program with Updated Features and Branding

  Finally, when the growth of an incentive program begins to stagnate, it might be a sign that it’s time to re-launch the program. A program re-launch gives craft beer producers the opportunity to step back and figure out what their prior program did effectively, as well as what they can do better. During this time, craft beer producers should also explore other pain points they would like their new program to target.

  A pause between programs can help build anticipation, as supply chain trading partners realize the value proposition of the previous program that they had begun to take for granted. Once the new program launches, with updated branding and new features, supply chain trading partners will enthusiastically re-enroll and craft beer producers will experience a renewed period of growth. Better yet, by using the knowledge gained from the previous program, craft beer producers can make their re-launched program even more effective than the first.

Planning Ahead for Program Management

  Additionally, craft beer producers can enlist the help of incentive companies to design and manage their programs. Just like crafting an excellent brew requires years of experience, so too does managing an effective incentive program. Working alongside an incentive company with a proven track record can help craft beer producers avoid potential pitfalls and take advantage of decades of experience in managing successful programs.

  Whether a craft beer producer is looking to launch their first program or improve a program that is currently underperforming, the initial investment of partnering with an incentive company can pay dividends down the road.

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