Becoming a noteworthy brand isn’t about fitting in with the cool kids
By Hanifa Sekandi
Your problem isn’t that your brand isn’t viable. Your problem isn’t that your beverage isn’t good. It is probably great. Your problem is that your goal is to be better than the cool kids, the cool beverages in town, that is. Remember in high school when everyone wanted to be friends with the cool kids? Is the idea of fitting in constantly on your mind? Where are the cool kids now? Who’s talking about them in 2026? As much as we love the cool flashy brands, we do. It is important to understand that becoming a noteworthy brand isn’t about fitting in with the cool kids. Some of your favorite brands were once outliers, something people often forget when a beverage brand becomes mainstream.
When you try to fit in, you tend to lean into inauthenticity. It’s like wearing a trendy hairstyle that doesn’t fit your face shape or getting a perm because everyone else is doing it. Oh, the eighties! It becomes a struggle to convince yourself every day when you look in the mirror that you feel good. You may fit in more, likely blend in, but you feel out of place. Imagine if a beverage, a bottle of bourbon or whiskey, could speak? We are in the AI animation era, so anything is possible. What would your beverage say to you? Our senses ignite our soul, and sipping your beverage should provide the information you need. How does this beverage want to show up in the world and on liquor shelves? How does it present itself to you? What does it trigger in you? Beyond igniting the desire for revelry.
The Odd Brand Out
Unbelievably, being the odd brand out is a good thing, the underdog if you will. You have no one to impress but yourself. You can focus on what feels right to you and your marketing team. Draw on raw, authentic vision and emotion. The same energy that drove legacy brands when they began. It’s that grassroots grit mentality, that there is nothing like this on the market. That you are indeed better than the rest. No competition needed, because when you view your brand as a timeless winner, you don’t compete; you simply show up and exist in a league of your own.
You’re the team that no one sees coming, but when they do, they admire you. They respect your beverage hustle, the product is stellar, and the marketing is bar none. Your goal should be to become an inspiration more than a competitor. Races eventually end. Every track athlete understands this. They do not spend their training season watching other runners run. Instead, they train, reflect, and continue. Understanding that self-reflection is the biggest hurdle to great outcomes. A hard feat to accomplish with social media. A medium that legacy brands did not have to contend with was a full view of what other beverage brands were doing in real time or at rapid-fire speed. They had to learn to stand behind and live with their marketing decisions. An effort that required continuous follow-through and promotion.
Be Bold Without Hesitation
So where do you start? Be bold. When you were in your youth, you were not limited by the constraints that plague you as an adult. You existed in a world of your own; it was okay to be bold and fun. You had a curiosity about life and the world. This is the energy your team needs to exude to become bold marketers. Marketers who do not strive to be boxed in and placed on a shelf, trying to blend in, hoping a beverage enthusiast will spot them. Your goal is to be chosen. Understanding buyers’ choices and what compels them to purchase a beverage they have never heard of or tried is essential.
What do you look for in a beverage? Be objective when ideating ways to boost your brand’s image. Also, what makes the cool kids cool? What would you do differently? View yourself as a leader in your industry. Remember, you are not competing; you are co-existing in an industry that needs variety. Your brand is the cherry on top of the whipped cream on an ice cream sundae. Two ingredients that add a burst of flavor. Your beverage adds that missing ingredient to a perfectly crafted cocktail. It’s the showpiece on the bar cart; a can never be without lager on a hot summer’s day.
It’s about being more than an afterthought. It’s about being the missing beverage, that something your consumer has been looking for. To achieve this, you must be bold in every way. The kind of bold that doesn’t go out of fashion, this isn’t about trends. The kind of bold that belongs in a league of your own, that is the first beverage that comes to mind in your beverage category. Your next question is most likely, ” How do you go about this? Just do it anyway is the answer. That wild idea of a futuristic campaign or one that takes consumers back in time, a beverage time traveller. This is the beverage marketing mindset to live by. Does your brand sparkle with color? Is it sleek and sophisticated? What story are you telling your consumer?
You must believe in what you are selling more than the person buying it with unequivocal confidence. Are you the punk rock of all beverages? Or giving luxury a run for its money? Be outlandish, but sensible. It isn’t about controversy; it’s about the conversation that your brand evokes and the feeling it enlivens.
You’ve Got to Have Faith
If you don’t believe in what your brand stands for, no one will. When you encounter opposition from other brands that want to push you out, how will you measure up? How will you manage the criticism from beverage aficionados? All that noise doesn’t matter. Drown it out, and just be, just exist, and have faith in your product. Put love into each bottle distilled, never compromise on quality ingredients, never dull your product to make a profit. Once you are firm about what your beverage brand stands for, all the turbulent times that this unpredictable industry throws at you won’t rock your foundation.
This is the secret that the best bourbon and ale makers discovered early on. Hence, they have outlasted many hopeful brands that thought it was a competition. Beyond the fun, each beverage is steeped in culture and history. It is this that topshelf brands hold onto firmly. Beverage brands built on struggle, triumph, and faith. Whether it’s the story of a family, a town, or a monastery, these beverages travel many roads, some lasting 200 years. So, are you in? Are you ready to join the legacy, or would you rather sit with the cool kids?
One of the more intriguing things I often see in beer is the use of cocoa nibs versus cacao in brewing. At one point, someone asked me about the difference, and while they may sound nearly identical—aside from switching an “a” and an “o”—they can bring noticeably different qualities to a beer.
For brewers, those differences go beyond naming conventions. The choice between cacao and cocoa can influence aroma, flavor intensity, mouthfeel, and even how the beer is presented to consumers. Understanding how each ingredient behaves gives brewers another tool when designing a beer meant to stand out.
Both cacao and cocoa come from the same plant, the Theobroma cacao tree, so similarities are expected. Because of that shared origin, most drinkers associate both ingredients with chocolate flavor. But seasoned beer drinkers know there is often a noticeable difference in the way beers express chocolate depending on which ingredient is used.
I actually explored this topic briefly in a YouTube video, which you can watch on the following page, where I broke down cacao versus cocoa and what each brings to a beer. The video provides a quick educational overview for beer drinkers, but it also highlights something important: many everyday beer shoppers may not know the difference at all and that’s where breweries have an opportunity.
Telling the Ingredient Story
In today’s beer market, shelves are packed, and competition is intense. Depending on the region, available shelf space for beer is even shrinking. That means breweries have two immediate challenges: first, getting their beer on the shelf and second, convincing someone to pick it up.
One area where breweries sometimes miss an opportunity is in how they communicate ingredients. It is not uncommon to see a beer labeled with “natural flavors,” which might be technically accurate but rarely tells the consumer much of anything. Even listing cacao nibs or cocoa on a label does not always clarify the experience if the drinker is not familiar with the difference.
But when breweries take the time to highlight those distinctions, they can create curiosity. And curiosity is often the first step toward someone trying a new beer.
Just like pouring a beer into a glass creates a moment of anticipation—the look, the aroma, and then the taste—the ingredients behind that beer can tell a story that draws the drinker in before the first sip ever happens.
The Flavor Difference
Cacao nibs are one of the most common chocolate-related ingredients used in brewing. They are essentially crushed pieces of fermented and roasted cacao beans. Because they are less processed than cocoa powder, they tend to retain more of the bean’s natural compounds.
In beer, cacao nibs often deliver a more intense chocolate character. They can lean toward the bitter side, producing a deeper, darker chocolate impression that many drinkers associate with high-percentage dark chocolate bars.
That bitterness is not a drawback, but it is an opportunity. For brewers aiming to create bold, complex stouts or porters, cacao nibs can provide a layered chocolate note that complements roasted malts and adds depth to the beer.
Cacao can also bring earthy undertones, which further enhance darker beer styles. Those subtle characteristics can make a beer feel richer and more complex rather than simply tasting like chocolate flavoring was added.
Cocoa, by contrast, often produces a smoother and slightly sweeter chocolate character. Cocoa powder is typically processed and partially defatted, which softens the flavor compared to cacao nibs.
Because of that, cocoa tends to work well in beers designed to mimic dessert flavors. Many pastry stouts, milk stouts, and sweeter dark beers rely on cocoa to create familiar chocolate notes that remind drinkers of brownies, chocolate cake, or hot cocoa.
Brewing Considerations
Working with chocolate ingredients is not always straightforward for brewers. One of the biggest technical challenges is fat content.
Chocolate naturally contains cocoa butter, which is essentially fat. In brewing, fats can interfere with foam stability and head retention—two visual qualities brewers work hard to achieve. Too much fat in the beer can cause the foam to collapse quickly.
Cacao nibs generally contain more cocoa butter than cocoa powder, so brewers need to be mindful of dosage rates. Using excessive amounts could impact on the beer’s ability to hold a proper head.
To address this, brewers may limit the quantity of nibs used or balance the recipe with malts known for supporting foam retention. Cocoa powder can sometimes be easier to manage in this regard because some of the fat has already been removed during processing.
Another crucial factor is deciding when to add the ingredient during the brewing process.
Timing the Addition
Some brewers add cacao nibs during the whirlpool or near the end of the boil. This method allows heat to extract flavor while also sanitizing the ingredients. However, prolonged heat exposure can drive off aromatic compounds.
Because of that, many brewers prefer to add cacao nibs during fermentation or conditioning. This approach allows the beer to extract chocolate characters more gently and preserve more delicate aromas. In some ways, cacao nibs are treated similarly to oak chips in brewing. The beer is allowed to rest on the nibs for a period, slowly drawing out flavor.
Another common technique involves soaking cacao nibs in spirits—often bourbon or vodka—before adding them to the beer. This step sanitizes the nibs and extracts additional flavor compounds that can carry into the beer.
This method is particularly popular with imperial stouts and barrel-aged beers, where the spirit character complements the chocolate profile.
Flavor Pairing and Recipe Design
The choice between cacao and cocoa also influences how other ingredients interact with the beer.
Cacao nibs tend to pair well with bold, complementary flavors such as coffee, vanilla, toasted coconut, and barrel aging. These combinations build layers of flavor that enhance the beer’s complexity rather than simply making it taste like chocolate.
Cocoa powder, on the other hand, is frequently used alongside sweeter ingredients. In pastry stouts or milk stouts, cocoa works well with lactose, vanilla, caramel notes, or marshmallow flavors to create dessert-like beers.
Another factor that can influence the final flavor is the roasting level of the cacao beans themselves. Much like coffee beans, cacao beans can be roasted at different intensities.
Lighter roasts may highlight brighter chocolate notes with subtle fruitiness, while darker roasts emphasize deep cocoa flavors with roasted character. Some craft brewers even explore single-origin cacao beans, which can introduce regional nuances into the beer.
South American cacao might bring fruit-forward notes, while African varieties can produce deeper cocoa intensity. These subtle differences give brewers another way to differentiate their beers in a crowded market.
Turning Ingredients into a Story
Ultimately, the decision to use cacao or cocoa comes down to what the brewer wants the beer to express.
Cacao nibs often create a bolder, more complex chocolate character with earthy depth and darker chocolate bitterness. Cocoa powder tends to produce a smoother, sweeter chocolate impression that works well in dessert-inspired beers.
Neither approach is inherently better than the other. Each simply offers brewers a unique way to shape the beer’s flavor.
But in today’s crowded craft beer landscape, how that choice is communicated can matter just as much as the ingredient itself. There is an acronym that comes up often in craft beer circles: FOMO, or the fear of missing out. With so many beers released each year, drinkers are constantly looking for something new and exciting to try.
Many beer enthusiasts—including myself—keep beer cellars specifically so we can grab bottles when they appear and enjoy them later. The fear of missing out often drives those purchases.
When breweries clearly communicate what makes their beer unique—whether it is the use of cacao nibs, cocoa powder, or even the origin of the beans—they tap into that curiosity. Sometimes that curiosity is all it takes for someone standing in front of a crowded shelf to pick up one beer instead of another.
For brewers willing to lean into the story, cacao and cocoa are more than just chocolate ingredients. They are tools that shape flavor, create intrigue, and ultimately help craft beers that drinkers remember.
From raw materials (including terroir) through processing to packaging, and during product shelf life, we are all aware that many factors and volatiles impact the flavor profile of our beers. In the US, the focus for many years dealt with pale ales and ever more hoppy beers – IPAs. Then along came the sour beer “revolution.” Now, recalling that in olden times the term ale referred to unhopped – beverages and beer to hopped styles. Thus, old definitions of ales without hops refer primarily to gruit (or gruyt), a mixture of herbs, spices, and botanicals used for bittering and preservation before hops became standard in the 16th century. These unhopped brews, were often called gruit ales and made use of ingredients like Myrica gale (bog myrtle), yarrow, and wild rosemary. Recipes for such beverages were included in an article by this author (Zymurgy, Vol. 16 #4, 1993). Today brewers are beginning to really expand their horizons and are using some long lost or less familiar to modern brewing practice ingredients – including cannabis-infused beers. Hence the brief note on overall flavor origins here. A growing concern over alcohol consumption has led to non-alcohol or lower alcohol concentration beers (NAB’s, LAB’s – NABLABS). The new realm requiring careful attention to attaining a truly, not “worty,” more representative beer-like flavor per style and allowing for shelf-life stability. Such beer especially NAB’s really requiring a Pasteurization process – to protect against microbial off flavors. And some issues of can corrosion and beer spoilage issues of late need thinking about in relation to all this.
Now a plethora of brewing research papers have appeared recently covering such topics noted above – however, many not accessible/discoverable by brewers. Thus, this article is focusing on a few keys to flavor and leads readers to some relevant publications for them to gain further insights allowing for continued flavorful high quality beer production. In addition, the tools for understanding sensory properties, known as flavor wheels, are considered with new versions made for this article.
Flavor wheels (new and older published versions) and now flavor maps, created by this author exist for beers – including barrel aged or rested beers, base malts, specialty malts, and hops (1,2). Data collected from across the entire process of beer production (including from flavor wheels) fits now into a term called Omics. In simple terms this refers to the masses of collective data that helps us see the holistic (or more complete) picture of a topic (3), including full and complete sensory profiling (2,4).
So now, the idea behind this short article and the three flavor wheels, and the schematic map of yeast (fermentation associated flavors) (Figures 1-4) is to present, in a hopefully more easily accessible format, the key terms associated with beer flavor characteristics. With a drive to get to the “blueprint” of the taste active components – all the key volatiles in the glass that are interpreted by the human sensory apparatus. Furthermore, the combinations of which are providing the flavor profile for each beer and style. Malt, hops and yeast the thrust of the content here. With respect to a fuller account of microbiological flavors and issues, coauthor Tony Aiken and I covered the subject in some depth in a recently published Microbiology volume (4). The base on that chapter being microbiological associated flavors and taints – thus, the good, the bad and the ugly flavor notes, involved in brewing beer, including non-alcoholic and low alcoholic beers, and how they are assessed using sensory evaluation methods and tools such as the flavor wheels and now flavor maps. More detail on beer in wood – rested or maturation flavors are covered elsewhere (2).
(Figure 1) A base malt types flavor wheel Typical beer flavor notes that can be expected in beers based upon the choices of malts available to brewers.
While this is a general paper the idea for the thread came from a very recently published work dealing with aroma component analysis to characterize lager, ale, and sour beer styles (5). This is quite the work – highly detailed and will be further covered in a subsequent article in this magazine (and noted below plus in Figure 5). Cutting now to the chase – or sniffing out the details, Figure 1 – base Malt Flavors, Figures 2 and 3 – Hop Flavors and Figure 4 – Yeast/Fermentation Flavors present a global view of beer flavor via origins and chemistry during processing. Aromatics (flavor = aroma and taste) – associated with raw materials – malt, hops and the cooking reactions known as the Maillard reaction – toasty, burnt, caramellic qualities – nutty, coffee, chocolate are included here. Figure 1 – Malt flavors – data is now enhanced by recent new data including terms: smoky, vinegar, earthy, roasty, malty, fruity, caramel, banana, floral/honey – with more specific odorant chemical names and odor descriptors included (6). The general data in Figure 1 obtained from an article by the author in the Scandinavian Brewers Review (Vol. 73, No. 1, 2016). With pale malt coverage and a sensory wheel of brewing malts noted and cited in another recent publication (7). For top fermented beers and influence of malt composition on the quality and flavors see Liguori, et al (8 and see 9). While things can get specific in terms of chemical names, common names, thresholds (the concentration of molecules – detectable and identifiable by the brewer and consumer) this article adheres mainly to the basics.
(Figure 2) An original base aroma qualities classification hops flavor wheel. The basics of simple hop aroma/flavor delivery encompassed eight “positive” attribute classes and one off-flavor first tier class. Figure 3 shows a more expanded view today.
Now, hopping to it, Figures 2 and 3 – Hop Flavor Wheels present the generalizations of flavor associated with and expected from hops. Details derived from the author’s works in the Scandinavian Brewers Review (Figure 2 – the general profiles of flavors conveyed by different hops and fresh and aged hops, and Figure 3 – new class hop descriptors – SBR, Vol. 73, No 2, 2016). Leading now into yeast and fermentation, a discussion of the interplay of hop varieties, harvest time, and yeast via seeking out sensory factors was presented very recently (10). A set of sensory terms that will lead us to the finale of this article, and thus to Figure 5 appear in this latter work.
(Figure 3) An expanded hop characteristics flavor wheel. A detailed set of twelve first tier terms, as standard terminology for hop-derived flavor classes, appears here along with flavor descriptors in the second tier.
Yeast generated flavor notes – a hugely complex topic, are summarized in Figure 4. With that figure reviewed it provides the final notes summarizing the basics of raw materials and fermentation and lead us back to work noted above by Herkenhoff, Broedel, and Frohme (5). Aroma component analysis leads to the characterization of lagers, ales, and sour beers. Here we focus only on the Lager world. Bringing general sensory characteristics as noted from raw materials and yeast into focus on a substyle specific basis. Creating even a basic flavor wheel from the data for six lager class substyles – Bock, Helles, Keller (cellar), Lager, Schwarzbier and Pilsners proved to overbearing and unreadable even with base descriptions for over fifty distinct chemical compound volatiles. So, a quick summary graph displaying twenty baseline flavor classes is presented here instead. Each class term deriving from or built up in flavor profile attribute from many of those fifty distinct compounds. Many individual compounds – acids/fatty acids leading to waxy, soapy, and cheesy classifications for example.
(Figure 4) A chart mapping out key flavor terms associated with yeast metabolism and fermentation. Fermentation provides many flavorful volatiles for beer. Components derived from malt, hops and other raw materials are also further processed at this brewing stage.
See Figure 5. The general similarities in flavor profiling and differences for the six lager class substyles are illustrated there. The y-axis numbers refer to the number of chemical component volatiles associated with the x-axis general class descriptors, ethereal, nutty, fruity etcetera. Brewers could evaluate such styles and agree or disagree, learn from, or add to their understanding of the flavor profile qualities of this overall class of lager beers. Building up their sensory lexicon. Note, the bar heights represent the numbers of components in that base class as noted for the number of beers examined per style. They do not represent the perceived intensity of those compounds adding to that category. Compounds are discerned and identified by consumers based on concentrations present that achieve their threshold of detection values. Volatile concentrations also vary in the different beer styles. Also, compounds can act together – synergistically (enhancing the detection of others) or antagonistically (masking other compounds’ aroma detection) by the human sensory apparatus. Moreover, we are all sensitive to different degrees in our sensory perceptions.
(Figure 5)Flavor vs. volatiles by number conveying key attributes for six lager styles.
In summary, beer flavor is complex. Noting here that flavor is the combination of aroma and taste – with aroma the major player in the overall flavor profile delivery. It is hoped though that the article has shown the basic – origins and flavor descriptors derived from raw materials to finished product – your quality beers. With the end note that things can change with pasteurization and during shelf-life of the beer in trade. We leave off here with three final references – one that characterizes key factors in lager beer flavor (11) and another discussing both positive key odorants and off-flavor notes in many different beer styles and detailing how to enhance aroma control and improve beer quality (12). The latter complementing well the work of Herkenhoff, Broedel, and Frohme (5). And finally, one on how pasteurization and storage can affect the aroma compounds in lager beer (13). Cheers.
A flavor wheel for this set of data proved way too detailed so a bar chart graph has been presented in place of either wheel or map. Here seen is a breakdown of key differences in flavor profiles for six lager style categories. The y-axis values represent the number of different chemical components (the aroma/flavor volatiles) detected that fall within the respective first tier – general class descriptors – nutty, fruity, floral etcetera for the six styles examined. Many components exhibiting similar or different fruity, floral etcetera attributes. Not detailed herein. The number of each style examined is shown below the style name. The reader may need to seek out information on the styles as presented here. A starting point would be the Beer Style guidelines from the Brewers Association. https://www.brewersassociation.org/edu/brewers-association-beer-style-guidelines/
References: [Or footnotes]1) Spedding, G. A brief history and use of sensory flavor wheels. Artisan Spirit. 2022. Issue 39.[Readable online at Artisan Spirit’s website and at the neat open access repository of papers and articles – ISSUU.}
2) Silvello, G. C.; Bortoletto, A. M.; Alcarde, A. R. The barrel aged beer wheel: a tool for sensory assessment. Journal of the Institute of Brewing 2020, 126 (4), 382–393.
3) Spedding, G. OMICS and the Future of Brewing and Distilling Research. In Chemistry of Alcoholic Beverages, ACS Symposium Series, Vol. 1455; American Chemical Society, 2023; pp 135–157, ch007.
4) Spedding, G.; Aiken, T. Chapter 19 – Sensory analysis as a tool for microbial quality control in the brewery. In Brewing Microbiology (Second Edition), Hill, A. E. Ed.; Woodhead Publishing, 2025; pp 325–374.
5) Herkenhoff, M.; Broedel, O.; Frohme, M. Aroma component analysis by HS SPME/GC–MS to characterize Lager, Ale, and sour beer styles. Food Research International 2024, 194, 114763.
6) Féchir, M.; Reglitz, K.; Mall, V.; Voigt, J.; Steinhaus, M. Molecular Insights into the Contribution of Specialty Barley Malts to the Aroma of Bottom-Fermented Lager Beers. Journal of Agricultural and Food Chemistry 2021, 69 (29), 8190–8199.
7) Svoboda, Z.; Hartman, I.; Běláková, S.; Pernica, M.; Boško, R.; Benešová, K. Sensory Analysis of Malt. KVASNY PRUMYSL, 2022, 68(3+4), 628-636.
8) Liguori, L.; De Francesco, G.; Orilio, P.; Perretti, G.; Albanese, D. Influence of malt composition on the quality of a top fermented beer. J Food Sci Technol 2021, 58 (6), 2295–2303.
9) Bettenhausen, H. M.; Barr, L.; Broeckling, C. D.; Chaparro, J. M.; Holbrook, C.; Sedin, D.; Heuberger, A. L. Influence of malt source on beer chemistry, flavor, and flavor stability. Food Res Int 2018, 113, 487–504.
10) Lino, T.; Forte, T. a. G. W.; Rodolfi, M.; Costantini, A.; Galaverni, M.; Forestello, G.; Carbone, K.; Tsolakis, C.; Pulcini, L.; Bonello, F.; et al. Exploring the interplay of hop variety, harvest time and yeast: Sensory and chemical dynamics in beer brewing. Applied Food Research 2026, 6 (1), 101729.
11) Hong, J.; Wei, H.; Yin, R.; Xie, J.; Huang, H.; Guo, L.; Zhao, D.; Song, Y.; Sun, J.; Huang, M.; et al. Characterization of Key Factors Associated with Flavor Characteristics in Lager Beer Based on Flavor Matrix. Foods 2025, 14 (10).
12) Șutea, C. M.; Mudura, E.; Pop, C. R.; Salanță, L. C.; Fărcaș, A. C.; Balaș, P. C.; Gal, E.; Geană, E. I.; Zhao, H.; Coldea, T. E. Beer Aroma Compounds: Key Odorants, Off Flavour Compounds and Improvement Proposals. Foods 2025, 14 (24).
13 Gagula, G.; Đurđević-Milošević, D.; Ncube, T.; Magdić, D. The effect of pasteurisation and storage on aroma compounds in lager. Journal of the Institute of Brewing 2024, 130 (2), 83–92.
About the Author
Gary Spedding, Ph.D., Brewing and Distilling Analytical Chemist. Moved from academic research and teaching into the world of brewing analysis and education in 1999 when appointed as manager then, subsequently, director of the laboratories at the Seibel Institute of Technology in Chicago. Now with over 25 years of experience in testing and judging/evaluating beers and spirits. Founded Brewing and Distilling Analytical Services in Kentucky (2002): analytical testing/educational training – beverage production and sensory experiences. Basic research and developing/improving methods of analysis. Invited speaker at renowned beverage and chemistry society conferences, author and editor of numerous articles, papers, and book chapters. Spedding is currently lead editor for the Journal of Distilling Science (JDS).
Top things that make craft beer bars, bottle shops and distilleries insurable (and uninsurable)
By David DeLorenzo
The hospitality industry is big business. The National Restaurant Association reported in February of this year that in December 2025 alone, “eating and drinking places” registered total sales of $100.2 billion on a seasonally adjusted basis, with a fourth quarter outcome topping $300 billion. The organization calls this sector “the primary component of the U.S. restaurant and foodservice industry.”
But often with great reward comes great risk. In 2025, the National Restaurant Association estimated 30% of bars and restaurants fail in the first year. While thin margins and stiff competition are among the reasons these types of establishments quickly close up shop, another main reason is complex operational demands.
While craft beer brewers and fine spirits developers may be passionate about their craft, they may not be well-educated on the business end of, well, business. Particularly when it comes to licensing and insurance, craft beer breweries, distilleries and other establishments making and serving liquor need to know the ins and outs of what makes them insurable — and more importantly, what doesn’t.
Being properly licensed and insured is an absolutely critical factor to the success of any business, particularly in the hospitality industry. This article focuses the lens on insurance and what insurance carriers are looking for. An establishment can end up paying a lot more for its premiums or be locked out of an insurance policy altogether, and it comes down to best practices.
There are three major components that insurance carriers are looking at when it comes to covering a policy for establishments like craft beer bars, bottle shops, distilleries and other places that serve liquor. The “big three” are the amount of liquor or beer volume being served, entertainment, games and late hours, and procedures for overserving prevention, training and documentation.
The amount of liquor or beer volume being served: The percentage of alcohol sales is a defining factor when it comes to insurance. Exposure is a definitive factor when it comes to how much an establishment should expect to pay for its coverage. For example, a restaurant with 10% liquor sales will very likely pay less than a bottle shop with 40% liquor sales or more. In addition to the liquor sales, the industry category will also have an impact on rates. This is due to the risks that the business encounters. Rates will vary based on the risk that the insurance carrier expects to take on with any given business that serves alcohol.
Entertainment, games and late hours: They say nothing good happens after midnight. And while there may be some debate on that, depending on who’s at the receiving end of that sentence, when it comes to insurance companies, late nights are a red flag. This comes down to the fact that the longer patrons linger in a place serving alcohol and the more they order, the more likely they are to become intoxicated and therefore a risk to the establishment, to themselves and to others. Late-night happy hours or last-call specials offered by establishments may also be looked at as a red flag. It could be construed as “encouraging” patrons to drink up as it gets closer to closing time, when they will then potentially get in their cars to drive home — big red flag.
Entertainment and games could also impact rates and coverage, once again, based on the risk that the insurance carrier is willing to accept. Certain entertainment and games hold less risk than others, depending on their nature.
Procedures for overserving prevention, training and documentation: Poorly or undocumented procedures, negative culture in the employee environment and lack of experience can be indicators that will make an insurance carrier turn away. Another big red flag is if an establishment has claims that are open or have reserves on them. This makes it extremely difficult for a new carrier to want to write the coverage on it.
Having proper training and procedures in place is one of the most important things an establishment serving liquor can do to enhance the safety of staff and patrons, to mitigate their risk for getting caught up in a lawsuit and also to obtain reasonable insurance rates.
Risks that establishments serving alcohol face: No matter how it’s looked at, liquor liability will always be a challenge that establishments serving alcohol will face, regardless of the state in which they are operating. However, that is not where the risk ends. There are also lesser-known or not-often-considered liabilities including product liability, contamination of product or product recall. There are risks such as fire or explosions from open flames and vapors, particularly in distilleries. Equipment breakdowns can cause a major business interruption and losses.
Best practices to become more insurable: The number one thing a business can do to keep its insurance rates lower is invest in safety protocols and meticulous standard operating procedures. The fewer claims businesses have and the more they can prove to the carrier that they run professional operations that abide by the rules, the more “insurable” they become. Some standard operating procedures to consider include.
Document it: Having air-tight documentation records and licensing is vital for any business, whether they are serving alcohol or not. But it is even more important for those who do. Documentation and licenses should also be easily accessible if they are needed in an instant.
Record it: Security and video footage are also crucial. Having a time-stamped video can be the very thing that protects a business if a lawsuit arises.
Train them: Keep excellent, well-documented records of employee training with alcohol, from service to batch tracking and other procedures regarding alcohol. For example, instill strict policies on checking IDs and make sure employees are educated on determining if a patron is perhaps already inebriated before serving them any alcohol. Make it common practice never to overserve anyone.
Clean it up: This goes beyond the physical appearance of the establishment. Owners should take care of how they are presenting themselves through their website, social media, branding and marketing. If the online presence looks disheveled and disorderly, the underwriter will assume that of the business itself and may be hesitant to cover a business for that reason. This also goes for the entertainment and experiences being promoted. Offering crazy activities in an attempt to attract new customers may end up costing establishment owners by way of higher rates or none at all.
Out of his passion for serving the restaurant and hospitality industry, David DeLorenzo created the Bar and Restaurant Insurance niche division of his father’s company, The Ambassador Group, which he purchased in 2009. For more than 20 years, he has been dedicated to helping protect and connect the hospitality industry in Arizona. For more: barandrestaurantinsurance.cohttp://www.barandrestaurantinsurance.comm.
Lost State Distilling’s name comes from its historical origins, as do the names of many of the spirits produced by this Bristol, Tennessee, producer of craft Rum, Gin, Vodka, Tennessee Whiskey, and canned cocktails.
“The name is derived from when northeast Tennessee, as it is today, tried to become a separate state in 1784,” said Nick Bianchi, Head Distiller and President. “The area actually existed for four years as an independent territory, having a governor and one official battle. It obviously never became its own state, but had it, it would’ve been known as The State of Franklin. Since it never became an official state, it became the Lost State of Franklin, and we are Lost State Distilling.”
Pivoting From Initial Intentions
“We officially started our journey in 2017,” said Bianchi. “I roped my dad in with me while originally wanting to start a craft brewery. I was a longtime home brewer and wanted to create my own commercial brand. But as we looked around, we noticed that there were already a significant number of breweries operating, which led us to explore craft distilling. I already had a nice appreciation for bourbon, so it was an easy decision to go down that path. It was just my dad and me, with really no experience, coming from the IT and oil industry, respectively. We began by working with friends at a Virginia-based distillery to learn the business and process of commercial distilling. We originally anticipated being a really small craft distillery. Then we ran across a really nice building in Bristol that we liked. It was bigger than we originally wanted, and larger than we had imagined, but we ended up taking it and growing from there.”
Bianchi tells Beverage Master Magazine that his initial main goal was to make a great Tennessee Whiskey. He experienced Clayton James Tennessee Whiskey, made by Big Machine Distilling, which opened his eyes to the fact that not all Tennessee Whiskeys have to be Jack Daniel’s or George Dickel. Bianchi wondered what else he could produce, and the rest, as they say, is history.
“It’s certainly been a journey,” said Bianchi. “We’ve had our share of hurdles, but each one has taught us how to evolve and pivot our plans when needed. And it seems we must pivot a little at least every year, depending on what the world throws at us. You don’t know what you need to know in this industry until you find yourself in a tight spot that forces you to adapt. It’s a fun industry, but it can be overly convoluted and complicated.”
The Goods
“We have two stills,” said Bianchi. “We have our 100-gallon hybrid StillDragon still that is modular, so we can control what we want to make. It’s got a separate distillation column for higher proof spirits, or we can use it as just a straight pot still. It also has a gin basket in line. We started making our white spirits on this still before getting our bigger still online. That’s a 500-gallon hybrid pot still and is our main production still at this point. We like to stick with pot distilling for now. We are slowly growing, so we only make what we need, and with the bourbon glut, there’s no need to make 30 barrels a day right now or overproduce in an oversaturated market.”
Bianchi uses local ingredients, all sourced within an hour of the facility. Production and bottling are done in-house, with vodka currently the most popular and most distributed product.
The tasting room can get busy due to hosting NASCAR races and the NHRA Drag Racing Nationals.
“We do get a significant amount of foot traffic then,” said Bianchi. “Within our tasting room, we offer a full line of tastings, bottle purchases, and tours. Visitors will find nine unique styles of whiskey, our apple brandy, aged and white rum, gin, and our popular line of canned cocktails. Customers will find that we’re pretty much open to anything. If you want to take a tour, you’re getting a tour from one of the distillery owners, so there are very few questions that go unanswered. You’re getting the information from someone who performs the process daily rather than a tour guide or random employee. We get a lot of positive feedback on that aspect of our tours.”
Evolving Through Contract Distilling
“Within the past year, we’ve pivoted our business model,” said Bianchi. “We’ve stopped pushing so hard in our tasting room and started focusing more on distribution. There was some writing on the wall last year with some decline in spirits sales, particularly bourbon. We also wanted to get into contract distilling, so we started working with some moonshine distilleries that weren’t equipped to make a grain-based spirit. That has since evolved into distilling private label brands for vodka, which is our big growth goal at this point.”
Bianchi said they started contract distilling with only four private-label liquor store brands but have since grown to 14 brands in East Tennessee alone.
“We’re also working on a bigger label client that would pretty much cover all of Tennessee except for Memphis,” said Bianchi. “I think companies have seen the Costco and Total Wine models of doing things and noticed the value of having their own brands versus pushing other national brands. That’s driving a big increase in people wanting to go private label, and it’s fueling our growth plan to the point that we are having to expand our bottling and production lines to accommodate the demand for private label. Most are private-label vodkas, but we have some rum brands and clients interested in flavored whiskeys and moonshines. Hopefully, this all goes where we hope it goes, but only time will tell. Private-label contract distilling isn’t going to make you rich overnight, but because of the changes we’ve seen in liquor stores and with specific distributors, it’s helped us keep the lights on. That business has helped us recoup everything we’ve lost due to decreased foot traffic, whether it’s because people aren’t getting out as much as they did before or because of the general uncertainty of what’s going on. We’ve had our share of punches since day one, and we’ve never predicted any of them, so I just say roll with whatever punches present themselves.”
Bianchi gets people all the time, usually after watching the moonshiner’s show on television, who want to get into distilling.
“We try to warn everyone about the reality of the business versus those types of television shows,” said Bianchi. “You see the fun, but there is a significant amount of work that goes on behind the scenes that no one knows about unless you’re in the industry. You can have the best spirits in the world, but if you can’t get them out there on the store shelves, it doesn’t do you any good. It’s pretty much dominated by the middle-tier distributors, and then by retailers’ willingness to take your product. Additionally, as a distiller, outside of your product, you really have no control over anything. It takes significant effort to actually get something out there. There are no guarantees, and you only get out of any business what you’re willing to put into it.”
In addition to working with friends at a Virginia distillery when Bianchi and his father were considering starting one, Bianchi also credits time spent at Sugarlands Distilling Company in Gatlinburg, Tennessee. Sugarlands Distilling allowed Bianchi and his father to gain valuable hands-on experience in commercial distillation and distillery operations through its distiller-for-a-day program. That is where they also heard about Moonshine University in Louisville, Kentucky, a six-day training program that teaches a “business plan to product on the shelf” curriculum.
“That was our first real exposure to what we might experience in the real world,” said Bianchi. “Working with a distillery gave us the hands-on experience needed to develop our own products and the ability to plan out and predict our production goals. No one knows what’s coming, so we prepared for four years down the road and hoped for the best. But now, there are more options for those interested in the industry. All, or most, universities offer course programs in brewing and distillation sciences, providing more education and insight into the industry than when we started. Before, if you didn’t distill illegally and have some idea of how everything works, you had to work under someone else to learn. Moonshine University was the only exception to that, and they did a fantastic job with training, at least the broad strokes of what you need to know.”
Bianchi tells Beverage Master Magazine that his end goal is to walk into a liquor store and see that Lost State Distilling is producing the store brands.
“Lofty goals, for sure,” said Bianchi. “But we hope to get to that point sometime.”
For more information or to contact Nick Bianchi and Lost State Distilling:
By Jorge Izquierdo, Vice President of Market Development for PMMI
As workforce woes persist, investing in training, technology, and pertinent partner outreach is the best way forward.
Labor issues continue to be a production stumbling block for craft beer and spirit manufacturers, but solutions, such as artificial intelligence (AI), automated systems, and targeted training, can help increase efficiency and overcome workforce problems, according to “State of the Industry 2025,” a business intelligence report from PMMI, The Association for Packaging and Processing Technologies.
Attaining and maintaining a qualified workforce continues to be one of the most demanding challenges facing the industry and is characterized by the shortage of skilled tradespeople, technician burnout, and limited internal capacity to meet customer demand.
Rising labor costs are reshaping brewery strategies, according to a recent study entitled Craft Beer Production in the US Market Research Report (2015-2030) from IBISWorld.
Breweries are paying more to attract talent and keep pace with inflation, but this puts a real squeeze on already-thin profits and forces innovative staffing and retention tactics, the report states.
Technological advancements in brewing techniques and supply chain management are resulting in better quality and more creative flavors, helping the market to grow, according to a study called Craft Beer Market (2024 – 2030) from Grand View Research.
At the same time, research from the Manufacturing Institute (MI) suggests that there is no one-size-fits-all approach for manufacturers seeking to revamp their manufacturing and training programs. In other words, manufacturers need to tailor their labor upskilling strategies to realize transformative operational benefits fully.
In fact, MI’s study concluded that manufacturing organizations that emphasize the development of adaptive skills are more likely to unlock a competitive advantage, accelerate their transformation, and directly address the manufacturing skills gap. The research also demonstrated that adaptive skills represent the critical translation point necessary for reskilling the current workforce and for rebranding, attracting, and retaining talent.
Many savvy manufacturers are considering automation not only to address production issues but also to alleviate the challenges of labor shortages. At PMMI’s 2025 Top to Top meeting, a report entitled 2025 Performance Optimization: Insights for Packaging Line Readiness concluded that three distinct, yet interconnected, phases create an environment of operational readiness. These phases are vertical startups (productivity), operator training (workforce), and IT-OT integration (automation).
The operator training phase focuses on ensuring that operators have the necessary knowledge and resources to perform their roles effectively. This phase emphasizes the importance of designing training programs around the needs of the workforce and adopting a people-centric approach. Key themes include using technology to improve training, enhancing the skills of trainers, and regular and hands-on training.
Technology to support training and improve information retention should include videos, interactive manuals, augmented reality, and tablet-based instructions. In addition, beverage manufacturers should request that original equipment manufacturers (OEMs) simplify machinery design and provide user-friendly and intuitive human-machine interfaces to accommodate operators with varying skill levels.
AI Provides Increased Efficiency
One tool for workforce development is AI. According to PMMI’s 2024 study, The AI Advantage in Equipment: Boosting Performance and Bridging Skills Gaps, AI is not at the level yet where tasks can be completed solely by the technology, so a human is still required to make final decisions. The key impacts that currently available AI solutions can have on the packaging industry are increased staff productivity, better machine performance and OEE, and the mitigation of skills gaps and labor issues.
AI technology, particularly AI assistants, has the most potential to improve staff efficiency and productivity. Time-consuming tasks, such as data entry and coding, can now be completed with the help of these assistants. This increases the speed at which projects can be completed, freeing up additional time for staff members to focus on other tasks.
With a high turnover of staff positions (particularly among maintenance staff and machine operators), optimized training can ensure that employees are receiving the highest-quality training available. AI assistants and generative AI predictive maintenance solutions enable users to ask questions about any issues they encounter, further allowing staff to upskill independently and reduce the risk of human error.
More Solutions Are Available
PMMI’s OpX Leadership Network explores common industry challenges and develops new work products through special task forces and solutions groups. The entire OpX library of solutions is free for all to use.
Recently, OpX has focused its efforts on bridging the workforce divide characterized by seasoned operators with decades of institutional knowledge leaving the industry, while a new, tech-savvy workforce comes in with a fresh perspective on learning, relevance, and impact. This generational shift demands not just replacement, but a reinvention of how work is performed.
To aid in this process, OpX has launched two industry-led solutions: Operator Training Standardization (OTS) and Data Management Standardization (DMS). Built collaboratively by OEMs and consumer packaged goods firms, these work products can help close the gap between experience and execution — accelerating onboarding, strengthening data practices, and elevating performance across entire operations.
Another tool, PMMI’s Mechatronics Certification program, provides technical credentials to employees through a series of tests based on industry-developed skill standards. The PMMI Mechatronics Certification program:
• Helps employers assess workers for core skills.
• Guides schools in developing curricula to prepare students for the manufacturing workforce.
• Provides a career pathway for students looking for rewarding careers in advanced manufacturing.
The Struggle to Stay Ahead in the Face of Constant Change
At the same time they’re adapting to new technologies and operational models, beverage producers are facing economic pressures, labor shortages, and regulatory changes, according to Ernst & Young LLP’s Trends in the Beverage Industry: Navigating Change and Innovation report.
Industry success requires innovation and optimized supply chains, as well as social media- and data-driven marketing strategies, even as market fragmentation complicates the landscape.
While many craft beverage manufacturers tend to focus on practical applications that can help solve real problems on the plant floor, one clear way to improve efficiency is by increasing corporate investment in workforce development programs.
When wastewater projects actually pay for themselves
By Frances Tietje Wang
As the beverage industry moves further into an era of necessary efficiency to accommodate skyrocketing costs, wastewater management cannot be an overlooked utility function. Aging municipal infrastructure, rising treatment costs, and stricter enforcement of industrial pretreatment requirements have pushed utilities to the forefront of operational and financial concerns. Under the U.S. Environmental Protection Agency’s (EPA) National Pretreatment Program, facilities exceeding domestic-strength benchmarks for biochemical oxygen demand (BOD), total suspended solids (TSS), or allowable pH ranges may face surcharges, permit modifications, or enforcement actions.
This regulatory pressure coincides with broader business expectations. Wastewater performance now sits at the intersection of financial risk, regulatory compliance, and sustainability reporting. As production varies and the market remains unpredictable with cost pressure and uncertainty, sewer bills continue to fluctuate, impacting overhead costs and future planning. Compliance failures can delay expansions, harm government relations, and/or require capital upgrades under compressed timelines. At the same time, water and wastewater metrics are now standard components of sustainability benchmarking and ESG (environmental, social, governance) disclosures in the brewing sector.
As a result, wastewater investments are no longer evaluated primarily as environmental gestures. The strategic question has become whether a given project delivers measurable return on investment (ROI) and protects long-term operational viability.
Defining “Payback” in Wastewater Projects
In beverage production, payback extends beyond a simple comparison of capital expenditure (capex) and operating expense (opex). Direct savings commonly include reduced BOD and TSS surcharges, avoiding penalties for noncompliance, and lower costs associated with chemical neutralization or off-site hauling. These kinds of savings align with municipal cost-recovery frameworks, which are embedded in federal pretreatment regulations 40 CFR Part 403, which is designed to prevent interference with publicly owned treatment works.
“Wastewater investments are no longer evaluated primarily as environmental gestures. The strategic question has become whether a given project delivers measurable return on investment (ROI) and protects long-term operational viability.”
Indirect value is often more consequential. Stable wastewater systems can reduce unplanned downtime, protect discharge permits, and preserve expansion capacity. In fact, research has shown that wastewater constraints frequently become limiting factors for brewery growth before brewhouse or fermentation capacity is exhausted.
Across utility data and academic literature, payback timelines cluster by project type. Pretreatment, solids capture, and flow-equalization projects commonly can achieve ROI payback within 1 to 3 years, whereas anaerobic digestion and water reuse systems often require 3 to 7 years. These all depend on scale, incentives, and local rate structures.
High-ROI Wastewater Projects Breweries and Distilleries Are Actually Using
Solids Capture and Flow Equalization: Upstream solids capture combined with flow equalization remains one of the most reliable ROI drivers in brewery and distillery wastewater management. Methods such as screening, settling, and rotary drum filtration reduce TSS loading before wastewater reaches municipal systems. This results directly in lowering surcharge exposure and downstream treatment demand.
Flow equalization further improves economics in smoothing short-duration load spikes associated with cleaning-in-place (CIP), yeast removal, or batch discharges. EPA guidance emphasizes that stabilizing hydraulic and organic loading often provides greater compliance benefit than adding downstream treatment capacity, particularly for batch-driven industries such as brewing and distilling (EPA, 2000).
This approach is reflected in brewery practice, as at Sierra Nevada Brewing Co., which documents wastewater treatment and solids management as integral components of its sustainability strategy. At the facility in Mills River, North Carolina, wastewater treatment infrastructure is embedded into site design rather than treated as an afterthought.
pH Neutralization and Smart CIP Controls: pH excursions remain among the most common enforcement triggers in municipal pretreatment programs. Extreme pH changes can inhibit biological treatment and damage sewer infrastructure. By using methods such as automated pH neutralization, conductivity-based diversion, and smart CIP controls, it is possible to reduce reliance on operator intervention and lower the likelihood of violations.
Scholarly reviews consistently describe brewery wastewater as highly variable, driven by batch operations, product losses, and cleaning cycles. The best option for managing these sources is in upstream practices, which is often more effective than relying solely on end-of-pipe corrections. Industry guidance reinforces optimizing sanitation chemistry and discharge timing, some of the most cost-effective wastewater interventions available.
Anaerobic Digestion (When It Makes Sense)
Anaerobic digestion (AD) can deliver strong returns when organic loading is sufficiently high and consistent. The U.S. Department of Energy identifies beverage production as a sector with meaningful biogas potential, in particular where waste streams are concentrated and predictable.
New Belgium Brewing is a well-documented example of anaerobic digestion. Trade engineering publications and supplier case studies describe how the brewery integrates anaerobic wastewater treatment and biogas recovery. In combining these two methods, the organic load is reduced while generating renewable energy, supporting both environmental performance and long-term cost control.
Distilleries, which typically generate higher-strength effluent than breweries, often reach economic thresholds for AD more readily. Breweries may achieve viability at larger scales or through co-digestion strategies, but it is important to note that the literature says that AD economics depend on operational discipline, energy pricing, and access to incentives.
Water Reuse and Process Water Reduction
Water reuse strategies, such as rinse recovery or reuse for non-product-contact utilities, can reduce both freshwater intake and wastewater discharge. The EPA’s Water Reuse Action Plan emphasizes “fit-for-purpose” treatment. The Plan discusses matching reclaimed water quality to its intended application rather than defaulting to over-treatment.
Eel River Brewing Company is an excellent example of how small breweries have implemented reuse-adjacent strategies without complete reuse systems.
By incorporating pretreatment infrastructure to reduce municipal impact and comply with discharge permitting requirements documented in municipal engineering analyses, the brewery illustrates how wastewater investment can scale to smaller producers when aligned with operational needs.
Economic analyses indicate that reuse projects are most viable in regions with high water and sewer rates or where discharge capacity is constrained, and when integrated into broader water-efficiency programs rather than pursued in isolation.
Grants, Incentives, and Financing: The Hidden ROI Multiplier
Technically sound wastewater projects proceeding are often determined by grants or low-interest financing if capital costs exceed internal investment thresholds. In the United States, the Clean Water State Revolving Fund (CWSRF) remains the primary financing mechanism for wastewater infrastructure, including eligible pretreatment and reuse projects.
Energy recovery projects may qualify for additional incentives through state or utility programs. The Database of State Incentives for Renewables & Efficiency (DSIRE) is widely used to identify applicable funding opportunities and rebates.
Producers who successfully secure funding tend to align wastewater projects with municipal objectives, such as reducing peak loading or deferring treatment plant expansion, rather than aspirational narratives. They may also use support applications with documented monitoring data rather than aspirational sustainability narratives.
Case Study Patterns: Making the Math Work, Not Waste
Across scholarly literature and industry documentation, three recurring patterns emerge:
1. Breweries implement solids capture and equalization, which consistently reduce surcharge exposure by stabilizing discharge characteristics.
2. Distilleries and large breweries integrate anaerobic digestion with energy recovery. AD can offset both wastewater and energy costs when scale and incentives align.
3. Mid-size producers leveraging CWSRF financing and state incentives frequently offsetting 30–50% of capital costs, bringing payback into acceptable ranges.
In layering strategies, there is an opportunity for immediate and long-term cost savings.
Wastewater as Strategic Infrastructure
Wastewater management has evolved from a compliance cost into strategic infrastructure. Breweries and distilleries that invest in the fundamentals of solids capture, equalization, smart controls, and right-sized recovery systems can reduce financial volatility, strengthen regulatory standing, and preserve growth capacity. As scrutiny tightens and costs rise, wastewater planning is no longer optional sustainability branding; it is a survival strategy for an operational reality.
Resources
Fillaudeau, L., Blanpain-Avet, P., & Daufin, G. (2006). Water, wastewater and waste management in brewing industries. Journal of Cleaner Production, 14(5), 463–471. https://doi.org/10.1016/j.jclepro.2005.01.002
Sierra Nevada Brewing Co. (n.d.-a). Sustainability. https://sierranevada.com/sustainability
The spirits industry is growing and this growth has enticed newcomers to enter the industry and start unique brands. Starting a new beverage alcohol business and entering the industry is challenging, to say the least. There are regulatory, financial, and technical hurdles that make starting a new alcohol beverage brand complex and challenging. Starting a new business takes an immense amount of time and more money than most people expect. Even if you spend many hours budgeting and planning to build a distillery it will likely take longer, and cost more than you thought. An aspect of a successful brand that is overlooked and underappreciated is that high-quality brands spend a great deal of energy on marketing their products. There is a faster and cheaper way to start a new brand you may not be aware of. The path to a quick start up is called co-packing. Co-packing puts the strain, stress and capital expense of production equipment on someone else and lets a new brand focus time and money on marketing and promoting the brand.This article will cover how co-packing works and weigh the pros and cons of launching with a co-packer.
The common path we see taken to starting a new spirits company is by building a business that manages all aspects of manufacturing and sales. While managing everything from start to finish is a noble goal, it is also expensive. When you manage production, packaging, warehousing, marketing, sales, and even distribution it is easy to flounder in the complexity of such a business. For a new entrant to the industry, learning all these aspects of business and succeeding at them is a huge challenge. The faster and cheaper way to launch a new beverage alcohol business is with a co-packer. This is done by working with an existing manufacturer who will make your product for you. By outsourcing the production of your product, you can focus on the two critical aspects of a beverage alcohol business which are sales and marketing.
Co-packing in simplified terms is outsourcing the manufacturing of your product. In a broad sense a co-packer is a group or facility that produces beverages and offers services to manufacture products for other brands that are not their own. A co-packer can be contracted to manufacture and produce your product for you. Whether you want to make bottled whiskey or canned vodka soda, any sort of beverage alcohol can be produced by a co-packer. Co-packers can package distilled spirits, ready to drink cocktails, liqueurs or nearly anything else you can imagine.
Why spend years building a distillery when a co-packer can produce a product in months?
There is far less capital outlay needed when working with a co-packer as you do not need to buy specialized equipment for bottling and then also learn how to operate it. By removing the capital-intensive aspects of manufacturing a product, the owners of a new brand will have more time to focus on selling their product. You can create a product and bring it to market quickly when the co-packer does the manufacturing for you. A good co-packer will help you avoid mistakes and manufacture your product ready to sell. Let’s explore the process step by step you take to bring a new brand of whiskey to the market with help from a co-packer.
12 simple steps to creating your own bottles of whiskey
• The first step toward creating a product is to decide what you want to make.
• Find yourself a company (co-packer) who will make the product for you
• Talk with the co-packer to understand the constraints and limitations of their equipment
• Select packaging that works and fits your brand and your copacker’s equipment
• Sign a contract with your co-packer and start putting the pieces together.
• Design the brand, logos, names, artwork, labels, and bottle selection. (have a pro help you)
• Take a break and enjoy a tasty cocktail
• While you are stopping for a refreshment, select the whiskey that will go in your bottle
• Navigate federal and state approval process (your co-packer should handle this)
• Order and secure raw materials so your co-packer can manufacture the product.
• Co-packer will bottle and package the whiskey
• Launch your brand.
Just like that you have created your very own brand of whiskey that is ready for its debut. A co-packer usually has a minimum order quantity and will likely produce at least a few hundred cases of bottled spirits. When the copacker is done packaging the product you will now have several pallets of whiskey that are ready to sell. While the simple 12 steps all sound straight forward, there are many critical aspects of work underneath this list. Behind every step there are decisions, details, licenses and permits that are required prior to the product being produced. Let’s dive a bit deeper into these critical decisions and how best to work through them.
The liquid in the bottle must taste good but more important than the whiskey is the brand itself. Creating a professional looking package takes experience and extensive design. There is much more to design than just selecting a bottle shape. You will need to create a brand with logos, label artwork, and many other design elements. Unless you have experience in branding and marketing beverage alcohol, the creation of a new brand is best managed by experienced professionals. Your product must have a polished look and feel for it to succeed. The way your product looks is the biggest opportunity you’ll get to sway consumers to consider tasting the product. If you take a moment the next time you are in your local liquor store you will likely find a few bottles that do not look professional or polished. These not-so-great looking bottles are often created when someone starts a new spirits company without design professionals on their team with alcohol branding and design experience. Hiring a professional designer is a worthwhile investment to help your brand put its best foot forward.
There are an abundance of distilleries that will sell you their spirits in bulk that can be packaged up into your own brand. Whether it’s Tequila, Vodka, or Bourbon Whiskey, all types of spirits can be bought in bulk. There are a few licenses and permits needed to buy barrels of whiskey, but those are easy to secure with the guidance of an industry professional. Taking the time to taste a variety of spirits will guide you to find the right whiskey for your brand. It is also important to look closely at the cost of the whiskey you are considering purchasing. The whiskey cost will impact what you will charge for your bottle and how much profit you will see.
While I believe that co-packing your first products is the smart path to launch a brand, some folks would argue that co-packing is not the best choice. Let’s weigh the pros and cons of co-packing to consider it from both angles.
What is the good side of collaborating with a co-packer? It takes extensive time and financial resources to launch a brand. A generous amount of time and money needed for a brand to launch successfully must be allocated to marketing and sales. This is essential to get a product onto store shelves and people buying the product. Co-packing affords a new brand the chance to conserve money, time and energy that would otherwise be put into manufacturing and direct that energy into selling the product. Co-packing affords a new entrant into beverage alcohol the space and time to learn the nuances of the business with much less overhead cost. Mistakes are not cheap to make and having a co-packer oversee the production work of your product ensures that you will make less mistakes when it comes to making and packaging the product. The largest advantage of not producing your own product is that you do not have to carry the high overhead of funding and operating a manufacturing facility.
Now it’s time to talk about the bad part of Co-packing. Plain and simple.It is expensive. Co-packers mark up the cost of their service to cover their costs of overhead, labor to, of course, make a profit. When working with a co-packing company, you pay a premium for them to manufacture your product. It will cost more per unit to produce a product with a co-packer than it would if you manufactured the product yourself. Some folks do not like working with co-packers as they find there is a lack of control. When a co-packer is making your product, you will not have direct control over every aspect of the manufacturing process. A key step to reducing the risk of quality control issues is collaborating with your co-packer to define their production standards. A good co-packer will define their quality standards in their manufacturing process and track it to make a product cleanly and correctly. One other potential downside to co-packing is the lack of a store front. Most brands launched via a co-packer do not have a tasting room or cocktail lounge to serve drinks and sell bottles. Selling products made via a co-packer will require wide distribution which has smaller margins when compared to direct-to-consumer sales.
It can be hard to decide what is the right way to create and launch a new product. Many factors must be taken into consideration to make an informed decision. While co-packing is perfect and cost effective for some it can be a bad fit for others. A distillery consultant or person with extensive industry experience is the best way to make an informed decision on how to launch your brand. Creating a new product and selling it can be a challenging and rewarding business endeavor. Launching a product the right way and finding success will make the creation of your product much more rewarding.
Kris Bohm is from Distillery Now Consulting. When Bohm is not helping new distilleries launch you can find him defending his beer mile record and exploring the world by bicycle.
Across the country, the hospitality industry continues to be a major economic powerhouse. As 2025 came to a close, the National Restaurant Association reported that restaurants alone added 150,000 jobs in 2025, and eating and drinking places added a net 27,200 in December (on a seasonally-adjusted basis, per the Bureau of Labor Statistics).
Most hospitality personnel — from owners to staff — know that operating a business in this industry is not for the faint of heart. Whether a bar, brewery or distillery, the hours can be long, fast-paced, stressful and exhausting. However, owning and operating a bar or restaurant can also be extremely fulfilling and rewarding.
Repeat customers of these types of establishments are often extremely loyal, finding solace and a “home away from home” at their favorite neighborhood bar or brewery. But there are some rather distinct differences in owning and operating a food service establishment and a bar, brewery or distillery, where liquor is the focus of sales.
Dennis Shaw, owner of Phoenix City Grille, a successful restaurant in Phoenix, Arizona, since 1997, and co-founder of the soon-to-be-opened Still & Barrel bourbon bar in Phoenix, Arizona, offers some insight, based on his more than four decades in the hospitality industry, working across restaurant and bar operations, in leadership and ownership positions.
“A liquor-focused bar is much more about curation, education and experience than volume. With a restaurant, food drives the visit; with a bourbon bar, the spirit selection and the story behind it are the draw,” said Shaw. “Inventory management is more complex, pricing strategy is critical and staff knowledge has to go much deeper. Every bottle has a purpose, and every pour should feel intentional.” Intention is key in any business, of course. However, Shaw notes that when it comes to bar businesses in particular, patience and relationships matter more than anything.
“Whether it’s securing rare bottles, navigating licensing or building the right team, nothing happens overnight,” he said. “I’ve also learned that guests today want authenticity — they want to know why a bottle is on the shelf and what makes it special.”
Still & Barrel’s General Manager Cliff Cragg, who has been in the hospitality industry for more than 20 years, echoed those sentiments.
When it comes to his takeaway while building Still & Barrel, he said: “I have learned that patience and relationships matter more than speed. Building a strong spirits program takes time, trust and consistency. There are no shortcuts.”
Prior to helping open Still & Barrel, Cragg previously operated a concept where he built the whiskey program from the ground up, which was recognized as one of the top whiskey programs in the United States by the time he left. Over the last few years, he has focused on building and managing spirits-forward beverage programs, barrel selections, and restaurant and bar operations.
One crucial factor to keep in mind is that today’s customers are knowledgeable and yet thirsty for more. Rather than simply ordering a fine spirit or rare wine, customers want to feel connected — to the establishment, to their experience and to the spirit itself. Providing them with knowledge or history about what the bottle holds can provide value for guests beyond what’s in the glass.
When opening a bar in today’s market, Cragg emphasized the importance of having a clear vision from the start — and remaining disciplined.
“Understand your costs and invest in your staff,” he said. “A great bottle does not mean much if the service and execution are not there.”
Knapp followed that advice up with his own: “Educate yourself relentlessly, invest in your staff’s knowledge and understand your market before you buy a single bottle. And be prepared: capital requirements, licensing timelines and inventory costs are often underestimated.”
It is of the utmost importance to ensure proper liquor licensing and air-tight insurance policies. Most knowledgeable, highly credible insurance brokers will advise bar and restaurant owners to work closely with an agent that is well-versed specifically in the language, the inclusions and more importantly, the exclusions that are often written into policies for establishments that serve alcohol.
One of the key differences that surprised Knapp during the process of opening Still & Barrel is how complex and restrictive liquor licensing and insurance can be, especially when dealing with high-value inventory.
“People are also surprised by how much capital is tied up on the shelves,” he said. “Some bottles sit for months or years, but they’re essential to the identity of the bar.”
Knapp encourages new bar owners not to chase trends but rather build a point of view. Upon developing the concept and the inventory for Still & Barrel, for example, Knapp said he largely relied on Cragg’s extensive knowledge of whiskey to build the brand’s inventory around balance — allocated and rare bourbons alongside exceptional everyday pours.
“We focused on producers with strong heritage, craftsmanship and consistency,” he said. “Some of the bottles we’re most proud of are those that are nearly impossible to find on-premise, paired with staff who can explain why they’re special, not just expensive.”
This explanation of importance or rarity, rather than price, further adds value to the product being sold and gives more meaning to the drinker.
For Cragg, that meant building the bar list at Still & Barrel with balance in mind, including approachable pours, premium options and a small number of truly special bottles.
“The ones I am most proud of are our private barrel selections because we tasted and chose them ourselves,” he said, adding, “They reflect what we actually like to drink.”
Offering rare and hard-to-find bottles gives a bar an edge. Offering something that not everyone has on their bar list makes it feel exclusive, even if the environment is as casual and welcoming as any other neighborhood bar on the block. Creating the proper connections in order to obtain those special pours is a key part of the business.
“Sourcing rare bottles is mostly relationship-driven. Allocations are earned through long-term support and trust with distributors and suppliers,” said Cragg. “Private barrels take time, travel and a lot of tasting before the right one is selected.”
Knapp agreed that long-term distributor relationships, purchase history and trust are essential.
“Allocations aren’t something you can buy your way into overnight — you earn them over time,” he said. “We stay engaged with distilleries, tastings and industry events, which helps us identify unique opportunities before they hit the broader market.”
This goes back to the idea of intention.
“In a liquor-focused concept, the bar is the point, not the support,” Cragg said. “The selection is tighter and more intentional. With fewer options, consistency and attention to detail matter even more than they do in a traditional restaurant.”
Ultimately, there are nuances with each individual establishment. However, overall success comes with putting hospitality first.
“Great bars and restaurants aren’t built on menus or bottles alone,” said Knapp. They’re built on people, consistency and attention to detail. If you get those things right, everything else follows.”
Cragg added, “I have learned that consistency and honesty go a long way. Trends change, but good hospitality, a well-run bar and a team that cares will always matter.”
Dennis Shaw took ownership of Phoenix City Grille (PCG), continuing the legacy that founder Sheldon Knapp built when he opened the restaurant in 1997, while elevating the guest experience through food, service and beverage programs. Shaw co-owns Still & Barrel with Knapp. He calls the opening a natural extension of that journey—taking everything they have learned at PCG and applying it to a more focused, spirit-driven concept.
Cliff Cragg is the general manager of Still & Barrel. He has more than 20 years of hospitality experience, previously operating a concept where he built the whiskey program from the ground up, which was recognized as one of the top whiskey programs in the United States by the time he left.
What are your brand’s goals this year? What do you want to achieve? Did you meet your goals last year? When most people think about a New Year’s resolution, they think about personal goals and solutions to improve their lives. Your brand is always looking for fresh solutions. It may be a complete revolution—an overhaul of what once was for something new and inspiring.
The beauty of this time of year is that it forces everyone to dig a little deeper and think critically about what kind of impact they would like to have. Seeing your brand as a movement, a cultural wave that people desire to be a part of, will allow you to see your consumers authentically. Understanding how your beverage fits in their lifestyle, their personal brand ethos, particularly for those who imbibe mindfully.
As you draft this year’s creative brief and refine your band guidelines, change your approach. As a team, come together and create a resolution board. A visual tool that will allow you to dream up ways to be an industry disruptor in the best way possible. Think big and be bold. Include places around the world that inspire you, food, culture, fashion, and every facet of life that will help your beverage become more than just another drink, but a lifestyle brand.
This allows you to see your brand in motion. Perched on a table at a cafe by the beach or poured while dining on a gourmet meal at a high-end restaurant in Paris. While you create this vision, do not think about trends. You are the trend; you are the movement. When you visualize your brand this way, you will not get lost in the race because you will focus on who is running next to you. Also, remember, having a community of other beverage brands is important. Do not compete, disrupt.
The Shift is Possible
It is easy to believe that, as a brand, you are stuck. The notion that you need to move full steam ahead with the way things are and have always been. Why would you purposely implement a brand shake-up? What about all the time, money, and effort spent on past initiatives? Should you abandon them? Remember, you are always stacking your brand wheel. Even during a brand revolution, you keep elements that have worked for your brand. It is not a complete elimination of everything.
A good example is when you decide to embark on a wellness journey. Yes, you are shedding parts of yourself, but the good parts remain intact. It also allows the best parts of you to shine. We often hide the best parts of ourselves beneath the things we do not like. Brands do this when they refuse to change. They refuse to make bold moves that, eventually, will prove to be beneficial. Do not change identifying markers that make you unique. Instead, think of ways to take the good and make it impactful.
So how do you get started? How do you make the shift? Look at your product performance. Review campaigns that had a great ROI. Then analyze areas where you missed the mark. Your answers are always found in the steps you have already made. You do not need to hire an agency or consultant to tell you this. A vision board will help you visualize this. This is a visual anchor to remind you of where you want to be or plan to go in the next 5 to 10 years. If you decide to hire someone to help you bolster this vision, you will avoid those who don’t see it and try to convince you to go in another direction.
Not all experts are gold stars. Even great advice can be bad advice. So many people had great ideas but then were steered away from them because they trusted someone else’s vision. Your vision was planted in your heart for a reason. So, remain clear and steadfast. Stay the course, like the best of the best who were beverage innovators of their time.
You’re Not Stuck
Once you have decided to make the shift and start devising a plan to make your beverage stand out, do not limit your possibilities. You are never stuck; you are just afraid. People often confuse fear with being stuck. With limited budgets or teams, it can appear this way. Fortunately, we live in a world where communication is at your fingertips. Your entry into the market is made easier, and barriers can be overcome.
Did you know that the founders of Airbnb first started their business by renting air mattresses to pay their rent? Or that John Schnatter, the founder of Papa John’s, started with rented equipment in a broom closet, his goal was to make enough money to date? You could be the next Ben Weiss, who launched his beverage brand Bai in his basement. His brand was acquired for $ 1.7 billion. When there’s money, there’s a way, of course, but when there is a WILL, there is a way.
The problem most people face is that they are not running their own race. Competition will always exist. Consumers will always have choices. Spending your time worrying about this will set you back. Look ahead and be thankful that the market exists. Imagine a world where only one beverage existed. Only one flavor by one brand. Life would be quite boring. Like nature, a forest full of trees is a forest full of trees, each with a unique story and distinct markings. Your beverage is a tree in that forest, and the people going on a hike through it will see you. They want to know what your story is and how you contribute to the beverage ecosystem.
Start the Beverage Revolution
It is exciting to think that there is a founder somewhere crafting a new beverage idea from their kitchen. It is exciting to know that there are beverage brands that are bold enough to try something new, to be the rebels of the beverage industry. What do you have to lose? There is so much to gain if you approach this with a fearless mindset. There are so many reasons why you should not start. If you ever ask someone in the beverage industry, they will often tell you all the reasons why it is a bad idea.
Isn’t it funny that someone who is doing something you desire deters you? You can see this as an opportunity to propel yourself forward into the unknown and write your own beverage brand story or give up. Look back and realize the what ifs you had control of.
What if you tried?What if you did things a little differently? What if their story is not your own?
No one will know unless you try. What is in a world-class beverage brand is the person who believed in their product. That never doubted that theirs is nothing like the others, just one sip, taste buds enlivened, and an industry transformed by you and your beverage.
