Tales From the Crypto

gold bitcoin

By: Raj Tulshan, Founder of Loan Mantra

StillFire Brewing is the first brewery in Georgia to accept cryptocurrency and customers are invited to use Bitcoin as payment for beers and other beverages, as well as, their merchandise, which includes t-shirts, caps, gift cards, and more. The small business decided to accept crypto so customers could use a fast, secure payment method, and the brewery owners appreciate crypto’s benefits, including no third-party involvement or bank fees. StillFire uses CoinBase, a Bitcoin payment processor, to handle the payments. CoinBase offers fast, next day deposits and a low fee – just 1% of transactions, as opposed to 2-4% typically charged by credit card companies. Notably, the brewery has joined more than 30% of U.S. small businesses that now accept cryptocurrency, as this payment method becomes more mainstream and popular.

  Threes Brewing, with locations in Brooklyn and Long Island, is also accepting cryptocurrency. The pandemic forced them to adjust their business model, which included updating their website and offering beer delivery direct to consumers. People were excited to buy the brews online and asked the brewery owners to start accepting PayPal. The owners decided to go one step further, offering a cryptocurrency option, as well, which was easy to integrate with their Shopify. Like StillFire, Threes Brewing uses CoinBase as their payment processor.

  Cryptocurrency is a digital medium of exchange that relies on peer-to-peer blockchain technology. It’s decentralized, meaning no central bank or government regulates or backs crypto. Buyers transfer funds directly to sellers without the third parties traditionally used to process payments. And people store their crypto through an encrypted wallet and are the only ones with a key to unlock it.

  Part of the appeal of crypto stems from the surge in credit card fraud that was accelerated by the pandemic. In 2020, the dollar volume of attempted fraudulent transactions rose 35% in April 2020 vs. April 2019, and, sadly, small businesses are often the targets. In contrast, crypto is considered to be a secure form of payment, with merchant protection, lower transaction fees, and other benefits.

  Increasingly, small businesses are accepting cryptocurrency. It’s innovative and trendy, attracts customers and prospects who use crypto, offers more e-commerce opportunities for beer retailers, and can reduce fraud.  And companies like Shopify and Square make it easy to accept crypto. Square even has a crypto team to support development. But is crypto right for your business?

When determining whether to go crypto, consider the following pros and cons.

Pros:

•    It offers lower transaction fees than credit cards. As StillFire and Threes discovered, there’s a lower transaction fee when using crypto vs. credit cards. While each credit card transaction costs a company 2-4% of the total transaction, crypto reduces these costs to less than 1% of each transaction. Over time, these seemingly small fees can amount to a substantial savings.

•    It provides another loan option for businesses. Small businesses often need to take out loans, especially during these disruptive post-pandemic times. Some business owners – especially those with large amounts of cryptocurrency – are opting for a crypto loan, where you pledge an asset (in this case, your cryptocurrency) to secure financing. Crypto loans often come with a host of benefits, including low interest rates, same-day funding, and no credit check.

•    You’ll get your money faster. Tired of waiting several working days for a bank transfer to clear? Crypto is much faster and can be processed almost immediately. Small businesses that need and want their money faster will appreciate this perk.

•    It’s more secure than credit cards. Crypto-

      currency is considered more secure than credit and debit card payments since crypto doesn’t need third-party verification, as these other payment types do. When someone pays with cryptocurrency, their data isn’t stored in a centralized hub, where breaches commonly occur. Instead, their information is stored in their own secure crypto wallet – and they’re the only one with the key to unlock it.

•    Crypto offers some merchant protection. Crypto, with its decentralized set up, protects merchants from fraudulent chargebacks. Transactions are final because no third party can reverse charges, as is the case with credit card purchases. As crypto regulation continues to evolve, there may be more merchant protections introduced in the future, especially as crypto becomes more mainstream and accepted by more small businesses.

•    It opens up more e-commerce opportunities. As Threes discovered, customers want a fast, easy, secure way to shop online. Now, they are selling to people in more than 30 states, accepting crypto as well as PayPal to give their customers purchasing options. Threes was able to expand their audience, moving beyond their New York customer base to sell beer and merch on a bigger, more national, scale.

•    It’s another option for customers. Accepting cryptocurrency offers customers additional ways to pay and provides them with extra protection and security for their transactions.

While cryptocurrency offers a variety of benefits, there are also some risks associated with it, and small businesses should be aware.

Cons:

•    Customers might not be ready for it. Since this type of currency is still relatively new, many people still don’t understand or trust it. Crypto might not be appealing to tech-averse or risk-adverse customers. Using crypto also requires some effort, as customers would need to set up their own digital wallet and learn how to buy with this type of currency.

•    There may be technical barriers for business owners. While Shopify and Square make it easy to add a crypto purchasing option, if a small business doesn’t use those platforms, it might be a bit trickier. Businesses need to set up a digital wallet on a digital currency exchange to accept crypto, which some people find difficult, especially if they aren’t particularly tech-savvy. Also, since cryptocurrency is an ever-evolving, information-dense space with a steep learning curve, it can be an overwhelming option for some business owners. It is volatile and unpredictable.

•    Digital currency is volatile and unpredictable, so if you’re a risk-adverse business owner, this might be too much drama for you. Keep in mind that Bitcoin was first valued in pennies in 2009 but rose to more than $65,000 per coin in February 2021. That’s obviously a huge range! Using a merchant service company, like BitPay or Coinbase, helps protect small businesses against price volatility by immediately exchanging digital currency for its current cash value. Be sure to do your homework, carefully researching cryptocurrency to decide if it’s right for your business (and your personality type!).

•    It’s not completely safe from cybersecurity threats. Crypto reduces the risks associated with credit card fraud, but it’s not completely safe from cybersecurity threats or breaches. There’s no proven way to completely prevent cybercriminals from accessing users’ crypto wallets, and crypto isn’t backed or insured.  Some cryptocurrency companies are working to reduce the risks of security breaches by fully insuring losses, but insurance doesn’t currently cover personal accounts, so you’re still responsible for securing your personal wallet. But if a crypto company like Coinbase is breached, your funds would be protected.

•    There’s uncertainty around crypto regulations. The regulations around cryptocurrency will likely continue to change and evolve over time, which means business owners will have to follow – and adapt to – these changing rules. Since cryptocurrencies are relatively new, the government is still looking at regulations and rules about things like reporting gains and paying proper taxes on crypto transactions.

•    It doesn’t cover basic business expenses. Businesses typically can’t use crypto to cover operating expenses, such as rent and payroll, so they’d need to convert payments to cover these monthly costs.

  Some breweries have adopted cryptocurrency and are proud to be early adopters of this technology.  Others are sticking to the tried-and-true cash and credit payment options. There are pros and cons to crypto, so give it some thought before deciding whether to accept this form of payment. Also, consider your personality and whether you’re willing to learn about crypto – and accept that it’s volatile – before finalizing your decision.

About the Author

  Neeraj (Raj) Tulshan is the founder and managing member of Loan Mantra, a financial advisory firm with best-in-class and proprietary fintech, BLUE (“Borrower Lender Underwriting Environment”). Loan Mantra, Powered by BLUE, is next-level finance: a one-stop-shop for business borrowers to secure traditional, SBA or MCA financing from trusted lenders in a secure, collaborative, and transparent platform. Clients turn to Raj because they know he will always pick up the phone and offer unparalleled financial counsel in a remarkably human—even friendly—way.

About Loan Mantra

  Loan Mantra is a financial services company designed to serve small and medium businesses with offices in New Jersey, Charleston, SC and New York. At Loan Mantra your success is our success.  This means that our attention, purpose, and intention are all focused on you, our client.  We are your ally to overcome obstacles, bringing peace through uncertain times to achieve your highest goals and aspirations. Your friendly, responsive agent will listen respectfully, and service your account actively through one of three locations in the US.  We speak your language whether it’s English, Spanish, Hindi, Bengal, Hospitality, Laundry or Manicure.

 Let us help you today! Connect with us at www.loanmantra.com or call us at 1.855.700.BLUE (2583)

Bent Brewstillery:  Innovation on Tap

man posing beside a stack of wine

By: Nan McCreary

Bartley Blume may work twice as hard to produce both beers and spirits in Minnesota’s first combination brewery-distillery, but he also enjoys twice the opportunity to roll out new products that come from his ever-creative brain. They include a hoppy IPA without bitterness and a whiskey aged in American white oak and finished on toasted pimento wood to complement the spice of the grain.

  “When I opened the brewstillery, I wanted to bring more diverse beverages to the market, so we were not always drinking the same old pale ales, IPAs and sours,” Blume told Beverage Master Magazine. “We wanted to get away from mass consumption to a true appreciation of craft beverages, to sip and not swill.” 

  As the brewstillery’s name “Bent” implies, beers and spirits are “bent” and not made strictly to style. “This sometimes comes from combining the best parts of two different styles,” Blume said, “and sometimes from just making something I think my friends and family will like.” 

  Judging by the brewstillery’s success, not to mention its multiple awards, innovation-on-tap has been a big hit with consumers. Clearly, this is the place to go when you want to try something distinctive.

A Way to Make Money Off a Hobby

  Like many craft brewery owners, Blume started making beer as a hobby. While working as an engineer in the aerospace industry— and tiring of the corporate world — his wife gave him a Mr. Beer Kit. “This was in 2007,” he said. “I started brewing little batches of beer and quickly became addicted. I thought to myself, ‘This could be a way to make money off of a hobby,’ so I sat down and wrote a business plan for a brewery.”

  During that time, another brewery opened near Blume’s home in the Twin Cities, adding to the fifth or sixth already in the market. To Blume, that was too many, so he switched his interest to distilling. After poring over distillation books—and crafting whiskey and bourbons on his back porch — he rewrote a business plan for a brewstillery. Combining a brewery and a distillery seemed logical to Blume because the processes are similar, and the skills are complementary. “At the time,” he said, “there were only six brewstilleries in the country. Mine would be the first in Minnesota, which was pretty exciting.”

  Blume introduced the Twin Cities to his first product — and his innovative spirit — at the 2013 St. Paul Summer Beer Fest, wowing the crowd with an American Imperial Stout infused with ghost peppers, the world’s hottest chili pepper. At the time, he was brewing his beers under contract at Pour Decisions Brewing Company in suburban Roseville. Through working together, the two entities decided to merge under the Bent Brewstillery brand. The partnership was serendipitous for Blume. He now had a “home” when breweries and taproom locations were hard to come by. He also acquired the talents of Pour’s head brewer, Kristen England, long-time brewer and Grand Master Beer Judge from the Beer Judge Certification Program.

  After renovating the taproom in Roseville, Bent Brewstillery opened a 1,700-square-foot space in 2014. The taproom seated 115 customers and offered 10 beers on tap. Within months, Blume added the distillery. From the beginning, the brewstillery’s mantra was to set itself apart by creating fresh products and staying at the forefront of innovation. “Even if the market wasn’t ready for it, we’d do it anyway,” Blume said.

  As enthusiastic as Blume was initially, the business presented — and still presents — some challenges in operating as both a brewery and distillery. “Yes, there are some parallels,” he said, “but it isn’t quite as complimentary as I’d hoped it would be. You have to do all the work you need to do for a distillery and all the work you need to do for a brewery.” 

  Specifically, Blume explained that he has to rely on different ingredients, bottle suppliers, distributors, and even different marketing strategies for each entity because the audiences are different. “It’s really twice the amount of work, which is why most people haven’t decided to bite this off.” 

  According to Blume, there are currently only several dozen brewstilleries in the country. “It’s good for me because I’m a workaholic,” he said. “It’s a true family thing. My wife is the bookkeeper and CFO. Even the dog comes to work.”

  Despite the work, or maybe because of it, for a brewer who started with a two-and-a-half gallon Mr. Beer Kit, Blume has seen his vision surpass expectations. Now in its eighth year, Bent Brewstillery has grown into a 20-barrel brewhouse with four 40-barrel fermenters, plus three-, five- and ten-gallon fermenters that allow for the production of small-batch brews. The distillery features a column reflux still with four plates. The still can be converted to a pot still with a restrictor plate on the bottom, designed specifically by Blume for maximum versatility. Annual production is 2,000 barrels of beer and 2,000 gallons of liquor. Beer is sold in the taproom by the glass, pint, growler and crowler. Whiskey is sold straight or in cocktails. Besides offering products in the taproom, Bent Brewstillery distributes 16-ounce cans and liquor bottles to liquor stores and kegs to bars and restaurants. The brewstillery has 450 accounts in Minnesota, the south side of North Dakota and the west side of Wisconsin.

Invent, Innovate and Inspire

  With Blume at the helm as distiller and England as head brewer, Bent Brewstillery continues to invent, innovate and inspire. Since the beginning, it’s brewed over 200 beers. “When we started, we made lots of sour beers, reawakening old-style beers that no one had made until recently,” Blume told Beverage Master Magazine. “Now we have a whole line of sours, including barrel-aged sours and straight-up kettle sours.”

  One of their most unique products is a Chilean Stout, made in collaboration with a local brewery in Santiago and created from ingredients that England brings back after judging an annual beer competition there. Next on the agenda is a cold-fermented IPA. “Fermenting an IPA cold as opposed to fermenting it warm is extremely rare,” Blume said. “The process makes it more crisp, clean and clear. It’s the opposite of the hazys.”

  In the spirits category, Bent Brewstillery offers a traditional vodka and a nontraditional gin with 14 different botanicals. Blume prefers to use fresh botanicals when he can get them, which means the gins will vary from batch to batch. Some products are especially distinctive:  Flame Bringer, a bourbon barrel sriracha-infused rum, and Tropical Whiskey, brewed and distilled like any other whiskey, but includes passion fruit, guava, coconut and citrus, added during distillation. “These are the little fun things that make us distinctive in what we create,” Blume said. “These spirits are all great by themselves, but they really compliment a cocktail. Our signature drink is the Old Fashioned created from our whiskey, and the sriracha-infused rum makes a great spicy Margarita or Bloody Mary.”

  According to Blume, it took a while for the public to accept his distinctive beers and spirits. “At first,” he said, “people would say, ‘Oh, that looks weird. It’s different. I’m afraid of that,’ but now I can’t keep those products on the shelves.”

  Customer preference is mixed, Blume said: 50% like the same beer all the time because they are familiar with it; the other 50 percent want something new. It’s the same split in the liquor stores and bars. Blume also sees a mixture in beer versus spirits preferences. “Having a taproom that serves both beer and cocktails is huge for us,” he told Beverage Master Magazine. “We get so many ‘mixed couples,’ where one likes beer and the other prefers spirits. Instead of drinking a beer here and then leaving to get a cocktail, they simply stay here. It’s been pivotal to our growth.”

Pandemic Problems…and Solutions

  Like all breweries and distilleries, Bent Brewstillery’s growth took a big hit during the pandemic. But, again, like others, it turned lemons into lemonade by making hand sanitizer. Blume dived into this project with both feet. The brewstillery bought tankers of ethanol and produced 65,000 to 70,000 gallons of hand sanitizer. It provided supplies to a large portion of the police and fire departments in the state and to hospitals and support companies. Bent also offered raw materials to distilleries at cost so those distilleries could help their local communities. “We went all out,” Blume said, “and it’s a great feeling to know we did so much to help. We had a supply of beer and spirits in our taprooms, so at least we were able to sell products to-go. We survived just fine.”

  With the pandemic waning, Blume plans to go “full-throttle” ahead, both in creating new products and staging events. Traditionally, the brewstillery has offered a winter luau, beer dinners, a St. Patrick’s Day dinner and car shows in their large parking lot. This year Blume hopes to bring back one of the brewstillery’s biggest events — a crawfish boil that attracted 2,500 people. Bent also plans to hold its annual barbecue competition on the anniversary of September 11. The competition, which draws 25 to 30 cooking teams, is a fundraiser for the Invisible Wounds Project. The local charity provides services to Minnesota’s military, first responders, front-line medical staff, corrections, dispatch and their families relating to mental health, PTSD and suicide issues.

  Blume and his staff (the brewstillery has seven employees, not counting the dog) will continue to innovate, always looking for new opportunities. “We’re always looking to grow,” he told Beverage Master Magazine. “On the brewing side, we want to keep giving people something different to try. With the sheer number of breweries out there that are coming out with new beers, people can literally have a beer every day and never have the same beer twice. On the distilling side, we are playing around with different products that people will hopefully like. Growth is difficult, but it’s the challenge we signed up for.”

For more information on Bent Brewstillery, visit www.bentbrewstillery.com

The Brewstillery Movement

By: Kris Bohm: Owner of Distillery Now Consulting LLC.

gin drink set

Breweries make beer and often their equipment has the capacity to brew more beer than there is necessarily a demand for. Plain and simple, idle equipment does not help generate cash flow. An alternative use to consider to keep idle brewery equipment running is whiskey. American single malt whiskey is the new hot trend in spirits. Single malt whiskey has been touted for decades in America as a premium whiskey, and now bourbon whiskey is absolutely booming worldwide. If your brewery has a brew house that is sometimes sitting idle, it is time to put it to work. With the addition of a commercial still for distilling, a brewery can turn an idle brew house back on, and start producing single malt whiskey. The addition of a distillery will create a new business avenue for a brewery that can bring in new customers and generate more revenue for the overall business.       

Brewers Making Whiskey

  A few of the well known breweries, who have jumped into the distilled spirits world, are Ballast Point and Rogue Ales. There are amazing spirits being produced and distilled by breweries all over the world and your brewery can seize this opportunity as well. Brewstilleries, as we will call them, are pioneering a new business model. By using existing equipment to produce the wort or mash for distilled spirits, a brewery can create a diverse portfolio of products which can appeal to a broad base of customers.

  Ballast Point Brewery is a notable and very successful brewery that added a distillery to their operation. The Ballast Point took on a wild side project in 2007 where they added a still to their brewery in California, to experiment in spirits production. The brewers there mashed a beer recipe, then lautered an un-hopped wort that was then fermented and distilled into single malt whiskey. They also used their equipment to cook corn mash for bourbon production. A few years later, their whiskies had aged in barrels and it was bottled then released. Both their single malt and bourbon were wildly successful and well received spirits. Ballast Point Brewery sold a few years after the distillery was started and their distillery branched off to become Cutwater Spirits.

Tools of the Trade

  Breweries and distilleries use equipment that is very similar for the production of beverage alcohol. Fermenters, pumps, hoses, yeast, mash tuns, lauter tuns, and fermenters are common tools utilized by both distillers and brewers. Some breweries have capitalized on this opportunity and co-utilize their equipment and expand into distillery operations.  Let’s detail a few of the tools that brewers use that distillers can co-utilize for whiskey production. Of course this can only work if the brewers are willing to share.

Brew House Mash Tun

  A brew house is the essential tool used for the production of beer. This brew house will sometimes be idle when there is not enough demand. The steam heated mash tun in a 4 vessel brew house is used to mash malted barley for brewing beer. This equipment can also be utilized to produce mash for whiskey. With a few small changes, a mash tun can be used to produce cereal mash, made with corn or rye, that is cooked and fermented for bourbon whiskey.

  The production of malt whiskey in the Scottish tradition, using 100% malted barley, requires more complex equipment than the basic cereal cooker utilized by most distilleries. The lauter tun is a unique equipment for separating barley from the sugary wort in beer production. When making American single malt whiskey, the lauter tun is used to produce wort for distillation in the same way it is used to make wort for beer.

Fermenters

  Every brewer and distiller has fermenters in which they transform grain from sugary liquid into alcohol through fermentation. The fermenters used in a brewery work perfectly for fermenting wash or wort destined to become whiskey. If the excess space is available to ferment, a distillery can make use of otherwise empty tank space. Often distillers ferment their wort for whiskey fast and warm. A fermentation is often finished and ready to distill in as little as 4 days.

Pumps and Hoses

  The workhorse tools of brewers and distillers are their pumps, hoses and tri-clamps. The same pumps and hoses can be used to accomplish liquid transfers in a brewery and a distillery. Sanitization is important to mention here as it is easy to introduce unwanted bacteria or yeast into hoses if a distiller is not careful and conscientious of proper sanitization, which is required in a brewery for beer production, but not as necessary for a distillery.

Yeast

  The essential ingredient that all producers of beverage alcohol must utilize every day is saccharomyces cerevisiae, or the fungi simply known as yeast. The yeast used by distillers and brewers is closely related. In fact, many brewstilleries will use the exact same strains for both brewing and distilling. The use of yeast and the knowledge of how to handle yeast effectively is similar for brewers and distillers. Sharing yeast strains and yeast propagation equipment between a brewery and distillery increases the value reaped from every batch of yeast.

  All of these tools above can be made to serve double duty for a brewstillery. Careful planning, management, and execution are key to successful sharing of equipment.

Behind the Scenes

  Many questions come up in the discussion of adding a distillery to a brewery. Let’s go through and look at some of the common questions.

  How does a brewstillery function and get licensed from a legal perspective?

  The answer to this question will vary widely depending on the location of the brewstillery. Every state and country has different laws on what a brewery and distillery are allowed to do when working in conjunction. Typically, the distillery operations are required to be separate from the brewery both in physical location and in bookkeeping. The way a brewery meets this requirement of separation is as simple as a wall that keeps the two businesses apart with a separate exterior door to enter the distillery. A distillery can share steam for heating and glycol for cooling with a brewery, but the key here is that the still and the vessels holding distilled spirits are kept separate from the beer. On licensing a distillery will need to get a federal and state distiller’s permit before they can start producing spirits and may also need local licenses or permits.

  How are records and bookkeeping managed for a brewstillery?

  When it comes to bookkeeping, the distillery part of the brewery is typically an entirely separate business. This means a separate business entity or LLC must exist for the distillery which will hold its own business license, separate books, and tax reports. For the day to day operations and transactions, a distillery within a brewery will often buy the grain from the brewery and lease the brewing equipment on a daily basis to make wort for whiskey production.

  How is a distillery taxed?

  Taxes are a big concern because distilleries and distilled spirits are taxed very differently than beer. Although they are taxed differently, by having the distillery operate as a separate business it makes the bookkeeping and taxes simple by not mixing them with the brewery. Volumes have been written on taxes of distilled spirits all about proof gallons, wine gallons, and gauging, but we will save a deep dive into taxes for another day.

  How much beer does it take to make whiskey?

  In the production of a single malt whiskey the sugar content of the wort is on the high side to maximize the potential amount of whiskey produced per batch.

  Often the ABV of a fermented wash is as low as 7% to upwards of 12%

  There are a multitude of factors that will affect the amount of whiskey produced per pound of malt, including mash procedures, fermentation, distillation and maturation.

  When distilling a beer you can expect to roughly see the following yields. This estimated yield includes the distiller’s cuts and loss from barrel aging.

  A single 31 gallon barrel of 10% abv beer can produce upwards of 25 bottles of whiskey.

Beer to Whiskey and the Hops in It

For the vast majority of whiskies both malt and bourbon are strictly made from grain. No hops or other flavoring agents are added. Beer, of course, has hops and specialty grains in it. A beer that is distilled into whiskey which we will call “hopped malt whiskey,” will carry the distinct flavor of hops and into the spirits. This can be good or bad, depending on who you ask.

  Let’s weigh the good side of whiskey made from hopped beer.

  Hopped malt whiskey tastes very different from traditional Scottish malt whiskey. Because it tastes so different and can be marketed as part of the beer story, a hopped malt whiskey is often well accepted by the public as a new kind of whiskey, since it is not compared against bourbon or scotch.

  There is a downside to distilling hopped beer into whiskey. Beer that is distilled into whiskey and then barrel aged carries a strong and unique flavor profile dominated by the hops. For some consumers, this flavor is off putting even to the biggest IPA loving hopheads. Most people that enjoy whiskey have a pallet that is trained to like bourbon or scotch single malt. A hopped malt whiskey tastes nothing like either of these spirits, your average whiskey drinker may not like unique flavors of such a spirit. This warning is not to deter a creative brewstillery from distilling such things, but to merely inform.

Let’s Make Some Whiskey!

  For those currently running breweries, you may be considering getting into distilling. If you are, be sure to do your homework or hire a pro to help you, as there are many differences between brewing and distilling. This learning curve can be expensive without prior experience. For those just getting started, the brewstillery model is a business worth considering that will give you access to a larger customer base, and create better returns on your equipment. Consideration of state laws is essential as they vary widely on the legality and requirements to operate on this business model. The future is looking bright for craft beverage alcohol production and brewstilleries are on the lead in producing new variations of traditional spirits.

  Authored by Kris Bohm the Owner of Distillery Now Consulting LLC. When Kris is not helping folks build distilleries and creating great whiskies, he is out riding cyclocross or defending his beer mile record. Would you like to talk about making whiskey? Drop us a line. Distillerynow@gmail.com

Bringing Brewing Full Circle From Craft to Culture

By: Quinton Jay

van in front of graffiti wall

In the heart of Fresno, California’s Central Valley, Arthur Moye enters the doors of Full Circle Brewing Co. (FCB), the region’s oldest-running brewery. Some days, he says, he still can’t believe it’s his.

  Prior to purchasing the brewery in 2016 and taking over as its CEO, Moye spent 15 years moonlighting his passion for craft beer as a homebrewer. During the day, he ran his own CPA practice as a successful career accountant, leaning on his academic studies at San Jose State University and prior experience working for two of the nation’s “Big Four” accounting firms to refine his strategic skills with numbers and business acumen.

  But, in true entrepreneurial fashion, Moye eventually wanted more, something that allowed him to blend his technical efficacy, his longstanding passion for craft brewing, and his deeply ingrained want to do more and give back to others within and around his native Bay Area community.

  “I definitely took a leap of faith when I sold my CPA practice to buy FCB,” says Moye, “but something in me knew that it was a chance I had to take. I needed to know if I could combine my experience as an accountant and strategist with my passion for craft beer, and if I could build a business model around the two.”

  Not only did Moye manage to successfully create a business model, but in the first four years after purchasing FCB, he was able to ramp the brewery’s production by some 3,000%. This explosion in production prompted Moye to expand the facility’s older 7.5BBL brewhouse, one that only produced draft beer locally to Fresno’s Central Valley, into a brewhouse with a 15-barrel capacity that was able to package and distribute its uniquely-flavored craft products all across the US.

“Beer” + “Entertainment” = “Beertainment”

  Moye will be the first to admit that he could not have acquired FCB, nor grow it into the Central Valley powerhouse it has since become, fully on his own. Like any tried and true entrepreneur, he knew he needed to rely on two vital components for its success: an empowering vision for what it could become, and the buy-in of the local community into that vision.

  “FCB was here long before I came along,” Moye says, “and so many members of this community wanted to see it revitalized just as I did, but I knew I needed to convince them. I started brainstorming ways we could turn FCB into the heartbeat of the Central Valley’s craft beer and entertainment scene, and the phrase ‘beertainment’ popped into my head.”

  As Moye explains, he not only wanted to create a successful brewery known for its winning craft flavors, but a gathering place where others could converge to disconnect, detach, and simply be mindful in the present moment. So, Moye and his team set out to establish FCB not just as a revitalized brewery, but one that doubled as an event and entertainment venue all under one roof. With his vision now clear, Moye set out marketing FCB’s rebirth to the community in Fresno’s Central Valley, and was fortunate enough to find funding from a group of local investors.

  “I’m not sure if I would call it ‘luck’,” Moye clarifies, “because that might imply that there wasn’t all this effort we put into refining the vision for FCB or acquiring funding to actualize it, but it just made sense that the investors who aligned with the vision were all locals to this area and its community. When you think about venture capital or investments in California, most people tend to think of Silicon Valley and companies like Apple or Tesla—not a craft brewery.”

  Moye’s adherence to his vision for what FCB could become, however, ultimately paid off. In 2016, he was able to acquire the brewery in full and immediately got to work. In 2017, he began reaching out to members of the entertainment industry, making introductions, fostering relationships, and creating partnerships to manifest his vision of “beertainment” for FCB. By the time the brewery had closed its crowd equity campaign and canned its first product of craft beer in 2018, FCB had already experienced triple-digit growth.

  With his vision and business model for FCB’s rebirth now in full swing, Moye started signing agreements with distributors throughout California to get his product in front of more customers in 2019. Less than a year later, FCB’s brand was being placed on shelves at major retail stores throughout the Golden State.

  But as Moye and his team at FCB would soon find out, not all that glitters is gold; even in California. Just months after FCB’s craft beer landed on shelves throughout his home state — each can sporting his coined phrase, “beertainment” — a new threat to business emerged in the form of the COVID-19 pandemic.

Pivoting to Find Value Amidst a Pandemic

  In mid-March of 2020, the world was wracked by the WHO’s declaration of the COVID-19 virus as an official global pandemic. All across the country, businesses that weren’t deemed to be “essential” were forced to close their doors virtually overnight, leaving Moye and his team at FCB scratching their heads as to how they could keep their business (and its vision) afloat. With the threat of a pandemic looming overhead, the “entertainment” aspect of FCB’s “beertainment” draw was shut down, so Moye had to once again get creative with his strategy in order to help his fledgling business survive.

  “During the pandemic, two of the most famous venues in town closed, one of which had been open for over 50 years,” says Moye. “FCB had taken over ownership of that venue, but we had to close it during the pandemic since it had no outdoor seating. My team and I put our heads together and collectively brainstormed ways we could pivot the business.”

  Ultimately, Moye and his team at FCB managed to keep their business alive by regularly hosting virtual shows with comedians, musicians, and other artists over Zoom. At the same time, they doubled down on FCB’s packaging and distribution, getting larger amounts of their craft beers into chain stores and craft liquor stores in California and 6 other states. They also picked up another brand, Sonoma Cider, and implemented their own iteration of a D2C sales model, deemed Full Circle 2 Go (FC2G), at a time when omnichannel retailing in the beer & wine industry was taking off in the US.

   “Running a brewery is one thing,” Moye adds, “but running a brewery that doubles as an entertainment venue also requires employees who can manage things like sound and security. When the pandemic forced us to shut down, suddenly these employees had no key role, so we asked them what their other skills are in order to keep them on board. Our security guards were repurposed as delivery drivers, and our venue’s promoter became the program director for FC2G.”

  As Moye explains, in a matter of mere months, the revenue from FC2G was able to match the revenue earned from their entertainment venue. Furthermore, by being able to pivot not only his brewery’s business model, but also the roles of his employees during the height of the pandemic, Moye was able to foster greater loyalty amongst his employees with FCB’s brand while simultaneously providing value to his brewery’s community. Now, nearly two years since the pandemic began, FCB still hosts comedy shows every Sunday night and has since been able to reopen its entertainment venue to more musical artists, albeit at lessened capacity.

Do What You Love, and You’ll Want to Work Every Day of Your Life

  Despite the onset and lingering effects of the pandemic, brewing craft beer has remained a thriving industry. With an economic impact of over $9 billion in California alone, Moye remains dedicated to his original vision for FCB as a communal hub where anyone and everyone can come together to unwind, destress, and share in their mutual love for uniquely-flavored craft beer and live entertainment.

   Additionally, as a black entrepreneur, craft brewer, and business owner, Moye is grateful that he is able to allow FCB to contribute towards the 1% of black majority-owned craft breweries in the US. Though black majority-owned craft breweries are still a distinct outlier in the industry, Moye hopes to see more post-pandemic events and gatherings like Barrel & Flow fest bringing black-owned-and-operated breweries together to celebrate Black arts, artists, and creators to help foster deeper DEI initiatives within the craft beer space.

  “It’s a little funny to me whenever I mention the ‘1%’ thing,” Moye adds, “because I still get responses from people like, ‘why does it have to be a black thing?’ But it’s not just about that—it’s a craft brew thing. It’s about finding a tribe of people who support you and your vision. It’s about finding other black-owned businesses breweries that support you because you all want to see more diversity, more inclusion, more representation, and more equity in the craft beer space. When you’re able to find those feelings in what you love to do, your work doesn’t feel like work.”

  It’s rare that we are able to find ourselves in a career that allows us to blend our technical acumen, interpersonal skills, and passions. Although, perhaps this is what makes the draw of craft brewing so attractive to so many. It grants those of us with a deeply-rooted love for craft beer to build a community around our ardor and share our enthusiasm with others, regardless of who or where they are.

Vegan-Friendly Beer

A Growing Trend To Watch This Year

By: Natasha Dhayagude, CEO, Chinova Bioworks

beer and pizza on the side

In an industry as competitive and ever-changing in terms of new products and trends, the ingredients for developing beer are constantly evolving. One trend to watch is the plant-based movement. Whether consumers are vegan or not, many consumers are paying more attention to what is on the ingredient label before they consume their favorite foods and beverages.

  Examine most beer labels carefully and currently, you will find that many beer brands are using animal-based compounds to process alcoholic beverages. Some animal-based compounds that are widely used throughout the production process of beer and alcoholic beverages are pepsin, a foaming agent obtained from stomach enzymes of pigs; chitin, derived from lobster and crab shells; and carmine, which is found in the crushed scales of cochineal insects. Another commonly used compound is isinglass, which is a kind of gelatin obtained from fish swim bladder. These compounds are often used in the alcohol production and filtering process to make drinks appear clearer and brighter. Clearing is an aesthetic concern and stability issue; it does not only look better, but it is more stable than cloudy beer.

But what if you Live a Vegan Lifestyle? Can You Still Enjoy beer?

  Because the vegan lifestyle is grounded in plant-based products, beer manufacturers must ensure the animal add-ons are completely taken off the list during alcohol production. With new technology, leading beer makers, including Budweiser, Coors, Corona and Heineken, have already begun shifting its processing to incorporate vegan-based ingredients instead of animal-derived ones.

  Vegan brewing is a growing trend, as more consumers are looking towards environmentally sustainable, plant-based options when purchasing food and beverages. While the market for vegan, gluten-free and low-calorie beers is still somewhat small, this industry is set to begin expanding as future generations become increasingly aware about the ingredients in their food and beverages. The growing trend of vegan brewing stems from millennials who are making more conscious decisions about what they consume, even when it comes to alcoholic beverages. Vegan beverages require a series of preparation and ingredients to meet the expectations of vegan consumers. Veganism has inspired the alcoholic beverage industry to incorporate plant-based and animal cruelty-free products. For many, being vegan has gone farther than just a trend; it is a lifestyle that many live by.

  Chinova Bioworks launched a major research initiative with College Communautaire du Nouveau Brunwick’s (CCNB) INNOV centre, supported by the New Brunswick Innovation Foundation’s Voucher Fund in 2021 to develop a new fining agent for vegan-friendly beer. Fining agents are used in breweries to clarify and brighten beer. The term “fining” is used to describe the forced clarification process. It increases the brightness of the finished beer by removing suspended yeast and haze-forming proteins and polyphenols. A beer with elevated levels of haze tends to deteriorate rapidly. This process also shortens aging times by removing the excess flavor-destabilizing components from the finished beer.

  For years, CCNB’s Grand Falls campus has developed technologies around brewing and distilling. Now, our company, Chinova Bioworks, has provided CCNB with a viable product and is putting its clean-label expertise to leverage the vast depth of brewing expertise at CCNB’s campus. Through this research, Chinova Bioworks will develop a new application for its proprietary white button mushroom fiber, Chiber, as a rapid fining agent for breweries. White button mushrooms contain many health benefits. Aside from the white button mushroom improving the quality of a product, it also has a notable amount of vitamin D minerals infused within the mushroom itself.

  Chinova’s mushroom extract is also a natural solution to reducing food waste and assisting in the production of vegan-friendly alcoholic beverages. Chiber is a cost effective, sustainable and vegan-friendly solution for the brewing industry. Before being used by breweries, Chiber has also been used for plant-based meat, dairy alternatives, sauces and condiments. It is a pure fiber extracted sourced from the stems of white button mushrooms that help improve quality, freshness and shelf-life and does not contain any allergenic materials from the mushroom, which results in increased consumer satisfaction and reduced food waste. Testing is also conducted to confirm the absence of regulated allergens. Chiber is odorless and tasteless; it does not alter the taste, color or consistency of beverages.

  Early results have shown that Chiber works eight times faster at settling yeast post-fermentation and can leave residual antimicrobial benefits to the beer, which makes it stay fresh longer. Chiber is a one-for-one replacement for artificial preservatives that provides the same protection from microbial spoilage, while being a natural and clean label ingredient. Chiber holds many certifications including: vegan, kosher, halal, organic compliant, non-GMO, declared allergen-free, paleo, keto-friendly, low FODMAP, gluten-free, Whole 30, and it has no sodium contribution.

  This research initiative comes at a time when many breweries are working to shift to vegan-friendly beverages to keep up with consumer demand for more sustainable products. Chinova Bioworks’ technology would provide brewers a vegan alternative to animal-based, isinglass fining agents and synthetic polyvinylpolypyrrolidone (PVPP) that has long been used in the beverage industry as a processing aid. Because many people are searching for vegan and plant-based options in every aspect of their lifestyle, Chinova Bioworks is committed to providing sustainable solutions through our white button mushroom fiber. Our goal is to help manufacturers produce clean-label ingredients and reduce food waste. Alcoholic beverages, beers in particular, are filled with animal-derived and synthetic ingredients, so we believe Chiber can make an impact for beer brands looking to expand their offerings to consumers. With this research, producers in the beverage industry will be able to consider the opportunity to incorporate vegan-friendly and sustainable products into their own beverages using clean ingredients. This research initiative will pave the way toward more vegan-friendly and sustainable beer and alcoholic beverages.

  In 2021, Chinova Bioworks worked on the research portion of the vegan beer initiative and with early adopters for market testing, while actively seeking innovative companies to take part in this initiative. Once this research initiative phase is completed, we expect that Chiber for alcoholic beverages will become available during the first half of 2022. The future for beverage companies is exciting and new technologies like Chiber may help many expand beverage offerings to a wider range of consumers looking for a good brew.

 Natasha Dhayagude

  Natasha Dhayagude, CEO and co-founder of Chinova Bioworks, a food technology company founded in 2016 to develop natural, clean-label preservatives extracted from mushrooms for the food and beverage industry. Chinova is headquartered in New Brunswick, Canada, and 90% of her team is made up of women practicing in STEM fields. Dhayaguede was named Startup Canada’s Young Entrepreneur of the Year in 2017 and Startup Canada’s Woman Entrepreneur of the Year in 2019 for her role in co-founding Chinova. Since then, she has raised $4.5 million in capital investment from major food-technology venture capitalists and has formed strategic partnerships with major multinational producers in the food-technology industry. Dhayagude earned her Bachelor of Science degree in biochemistry from the University of New Brunswick.

 For more on Chinova Bioworks, visit https://www.chinovabioworks.com

Unpacking Findings From the Craft Spirits Data Project

By: Becky Garrison

craft spirits tray

While Jason Parker, co-founder and President of Copperworks Distilling Company, reported an 80% drop in revenue in 2020 due to Covid-19 closures and restrictions, in 2021, Copperworks actually expanded their operations. After the furniture store directly next to their Seattle water-front property closed, they plan to lease this establishment with plans to turn this facility into a cocktail bar and event space.

  In January 2022, Copperworks signed a lease to build in the former Nine Yards Brewing facility in Kenmore, Washington. They raised $2 million for this expansion, which will allow them to distill ten times more spirits since their partner breweries, Pike Brewing Company, Elysian Brewing and Fremont Brewing, cannot produce enough product to meet the growing demand.

  Copperworks’ ability to grow during this global pandemic was emblematic of other craft distiller-ies, evidenced by the 2021 Craft Spirits Data Project report. The report was presented on De-cember 7, 2021, by the American Craft Spirits Association and Park Street Companies at the Annual Craft Spirits Economic Briefing during ACSA’s Annual Distillers’ Convention & Vendor Trade Show in Louisville, Kentucky.

  Since its inception in 2016, the Project has been a research initiative designed to quantify the number, size and impact of craft spirits producers in the U.S. Among the industry groups who participated in this project include the Alcohol and Tobacco Tax and Trade Bureau and the Na-tional Alcohol Beverage Control Association.

Assessing the Growth of Craft Distilleries

  Despite the global pandemic, the U.S. craft spirits category as a whole did grow in both volume and value in 2020, albeit at a slower rate than in previous years. Park Street CEO Harry Kohlmann attributed the slower growth rate to the early period of the pandemic when on-premise sales were shut down in a significant portion of states and consumers were “pantry loading” the brands that were available at off-premise locations. Pre-pandemic, craft spirits brands often prioritized onpremise to brand build, so it stands to reason this period was detrimental to the category.

  However, as Copperworks’ story illuminated, craft spirits companies are nimble and innovative. Kohlmann noted that the majority of them were able to transition to a market strategy that relied more on e-commerce and off-premise sales. Also, Kohlmann pointed to a 2020 trend that partial-ly made up for the drop in sales early in the pandemic regarding consumer buying habits. “Consumers went from purchasing big staple brands early on in the pandemic to more premium ex-pensive products like craft spirits when the pandemic panic subsided.”

Craft Distillers by Size

  In compiling this report, the Project team utilized data from surveys, regulatory agencies, nation-al and regional industry data sources, survey data, interviews and team assessments. The report defined a craft distillery as a “licensed U.S. distilled spirits producers that removed 750,000 proof gallons (or 394,317 9-liter cases) or less from bond, market themselves as craft, are not openly controlled by a large supplier, and have no proven violation of the ACSA Code of Ethics.”

  The survey delineated between small, medium and large craft distillers by a range of gallons and 9L cases removed from bond annually. A large craft distiller produces 100,001 to 750,00 gallons (52,577-394-317 9L cases), a medium craft distiller produces 10,001-100,000 gallons (5,259-52,576 9L cases), and a small craft distiller produces 1-10,000 gallons (1-5,258 9L cases).

  Small producers make up 90.1% of all U.S. craft producers though they are responsible for just 10.3% of annual case sales. While larger producers only make up 1.6% of the total number of craft producers, they are responsible for 56.6% of cases sold.

  As of August 2021, the number of active craft distillers in the U.S. grew by 1.1% over 2020 to 2,290. To put this growth into perspective, Park Street charted the growth in distillery numbers from 2015 to 2020. During this time, large craft distillers grew from 23 in 2015 to 37 in 2020, a 61% increase.

  Also, the number of medium craft distillers more than doubled from 73 in 2015 to 188 in 2020, while small craft distillers nearly doubled from 1,067 to 2,054.

Sales of Distilled Spirits

  The survey compared results from 2020 sales compared to sales in 2015. These statistics were not broken down by ecommerce versus brick and mortar sales. Nor did this Project address the impact of grassroots marketing strategies employed by some distillers during Covid-19, such as pairing with restaurants and bars to offer cocktail-to-go kits or forming collaborative local alcohol delivery services.

  The number of cases produced by medium craft distillers has grown from 1.3 million 9L cases to over 3.9 million 9L cases. On average, the number of cases produced by a medium-size craft distillery rose from 18,000 9L cases to 21,000 9L cases. Small distilleries grew from 597,000 9L cases to over 2 million 9L cases, with the average number of cases increasing from 559 9L to 663 9L cases.

  Overall, the U.S. craft spirits market volume reached over 12 million 9L cases in retail sales in 2020, at an annual growth rate of 7.3%. In value terms, the market reached $6.7 billion in sales, with an annual growth rate of 9.8%. U.S. craft spirits market share of total U.S. spirits reached 4.7% in volume and 7.1% by value in 2020, up from 2.2% in volume and 3% in value in 2015 and 4.6% in volume and 6.9% in value in 2019.

  In terms of distribution, large producers are often nationally distributed, medium producers are usually distributed regionally, and small craft distillers tend to be only available locally. In 2021,  46% of the total U.S. craft business occurred in the craft distiller’s home state. This local distribution accounted for 59.6% of sales by medium producers. For large producers, out-of-state business sales remain key, accounting for 70.9% of the total business.

  While direct sales at the distillery are key for all craft distillers, they are particularly important for small craft producers, with over 47% of their total business coming from this sales channel. Along those lines, less than 8% of the total business for small craft distilleries comes from outside their home state, though this number appears to be growing slowly.

  Exports add 0.9% to the overall volume for U.S. craft distillers, with medium craft distillers reporting 0.2% sales from exports. These exports declined by 32.9% from 104,000 cases in 2020.

Employment In Craft Distilleries

  According to this survey, COVID-19 had a heavy impact on the U.S. craft industry. Between 2018 and 2020, the average number of full-time employees decreased by 24%. In 2019, total employment surpassed 30,000 but was reduced by nearly 50% in 2020 to under 17,000. While this data points to a significant drop by any standards, Kohlmann noted that the industry still maintained volume growth at a 7.3% rate, reaching 12 million cases produced with fewer employees.

Ranking of Distilleries by State

  In breaking down the number of craft distilleries by region, the West and South contain the highest percentage of distilleries at 30% and 29.3%, respectively, followed by the Midwest with 20.7% and the Northeast at 20%.

  The top five states that produce the most craft spirits are, in order, California (190), New York (180), Washington (135), Texas (135), and Pennsylvania (117). In this ranking, Pennsylvania passed Colorado, which has historically been in the top five. These five states make up 33% of the U.S. craft distilleries. The next five states––Colorado (107), Michigan (88), North Carolina (80), Oregon (77) and Ohio (73)–– comprise an additional 18.6% of the market, with the remaining states representing 48.4% of the market.

Impact of Legislation on the Industry

  The Craft Beverage Modernization and Tax Reform Act reduced the Federal Excise Tax on dis-tilled spirits from $13.50 to $2.70 per proof gallon for the first 100,000 proof gallons removed from bond annually. As a result of this decision, the U.S. craft spirits industry invested $759 million in their businesses, rising from $698 million in 2019. According to the Project, the top moti-vation for investing was expanding to meet consumer demand and increase visitor space.

  As a small craft distiller who opened during the pandemic, Stephen Hopkins, owner and distiller at Aimsir Distilling in Portland, Oregon, pointed to how state law can aid small craft distillers for whom tasting sales remain critical. “Oregon recently updated its law to reduce the taxes on tasting room sales which has really helped our business survive the pandemic.”

  Also, he noted the need to streamline the process of moving products to different states. “The overhead of moving to another state is very high and often hard for small producers to overcome. Even regional states being more cooperative would help small producers as well as the consumers.”

“SHOW ME THE MONEY”

After Friends and Family, Where Do I Get Growth Capital?

By: Quinton Jay

dollar bills flying

Like most entrepreneurs, founders and owners of smaller craft breweries and distilleries often find themselves having to wear many hats. You need to be aware of your internal operations and external logistical factors in your business’s supply chain, as well as understand how to best market and sell your brand’s products.

  Arguably one of the most important hats you will have to wear that is not obvious is the one that reads “finance.” Without having a finger on the pulse of your business’s finances, you’re setting yourself up for inevitable failure. Running out of cash is the number 1 killer of businesses within the first two years.

  When your finances start leaning towards the red, or you know your business requires an additional injection of capital to grow successfully, it can be easy to feel frustrated and discouraged. But this is simply another part of business; you can’t expect to reap the benefits without having to face and overcome the hurdles and challenges you’re bound to encounter.

  If you — like many other small business owners — were able to obtain at least a portion of your original capital through friends, family, or other investors, this may not be a possibility further down the road. This is where that “finance” hat comes into play once more. In order to emerge from uncertainty with a brewery or distillery that is ready to continue growing, you as a founder or owner are required to find alternative means of raising funds, especially if your overarching aim or goal is to land an eventual, profitable exit. But where do you start?

  Here are some ways that you can use as means of obtaining additional growth capital for your small brewery or distillery business when reaching back out to friends and family is no longer an option.

Understand the Realm of Private Equity Investments

  As the Managing Director of Bacchus Consulting Group and its capital management fund, I have more than twenty years of experience managing, consulting for, and investing in more than a handful of small, independently-owned brewery and distillery businesses. I have helped dozens of businesses in the industry understand their options when it comes to raising growth capital through VC investments, the separate stages of fundraising, and the impact that each fundraising option has on those businesses.

Private Equity Funding

  When the time comes to look into raising growth capital for your small brewery or distillery business, the most prominent option you will run into is private equity (PE). To put it simply, PE involves investing in companies using capital that has been sourced from individual or institutional investors, as opposed to investing in companies using capital sourced from public equity markets like the NASDAQ or New York Stock Exchange.

  For the sake of insight, the general thesis of any PE investment is three-fold. A PE investment is made to: firstly, purchase a company (or portion of a company) using significant leverage and a minimal amount of equity; secondly, utilize the industry expertise and synergies of the PE investor(s) in order to maximize the growth and efficiency of the acquisition or investment made, and; thirdly, to sell that acquisition in an approximate period of 3-7 years based on the company’s improved metrics and lowered levels of debt.

  A common misconception with PE funding is that giving away equity in return for capital is “free,” but this could not be further from the truth. Selling equity for capital is simply a means of delaying payment. With PE funding, there’s no true cap on what you can give away in return for the growth capital you want or need. If you believe in your business, you’re better off acquiring debt rather than selling a portion of your equity. When you give away equity, you’re giving away infinite returns in perpetuity.

Alternative Lenders (Non-Bank Financing)

  Some sources of alternative financing include:

●    Merchant Cash Advances (e.g., Quickbooks capital, Shopify capital, AMEX Merchant Finance, etc.);

●    2nd Lien Lenders (similar to a 2nd lien on a home mortgage)  and;

●    Unitraunche Lenders: a hybrid lending model that combines multiple different loans — sometimes from multiple lending parties — into one, with a blended interest rate that tends to average those of the lowest and highest rates of the individual loans lent.

  As their name states, these are each an alternative form of financing available for businesses looking for access to growth capital. However, these forms of financing for businesses tend to be riskier on the part of the lender, hence why they charge more for these sources of growth capital.

Traditional Lenders (Bank Financing)

  Financing for growth capital through bank loans is another available option for small businesses. This avenue tends to come with lower interest rates than most sources of alternative financing but is usually much more difficult to acquire.

  Financing can also be done through debt, rather than its equity, but again: if your small brewery or distillery business is already deep in debt, it may not be the most beneficial option available to you. Although, when acquiring bank debt, or any debt instrument (as opposed to equity via PE financing), there’s always a cap on how much you can pay for the use of those funds received.

Finding the Right Investor for Your Brewery or Distillery Business

  Regardless of which financing option you choose to go with when searching for additional growth capital, the most important factor to keep in mind is to find the specific investor, fund, or lending institution that compliments your business and its goals. If your aim is to grow your brewery or distillery into a business that can be acquired by a larger parent company in a multi-million dollar deal, then PE financing is likely your best option. Similarly, if your business has a higher amount of debt, finding an investor that can provide you with acceptable terms for a second lien may be the avenue you wish to pursue.

  Whatever type of growth capital investment you wish to see for your business, be sure to ask yourself questions regarding the synergies your investor has with your business. Some examples of these might include:

●   Does this investor have good chemistry with me and my core leadership team?

●   Does the investor have a willingness to help and mentor me and my team on how to best successfully grow our business in line with our goals?

●   Does this investor believe in me, my team, and our ideas for our business?

●   Do they have relevant experience and connections we can utilize for additional investment opportunities now and/or in the future?

●   Does this investor have the domain and expertise — along with the capital — necessary to help carry our business forward through periods of growth we want to achieve?

  If your answer to any one of these questions falls into the realm of anything other than “yes,” then chances are high that they are not the right investor to bestow you and your business with growth capital. Additionally, if you or your core team are not ready or willing to accept mentorship from an investor, then don’t waste their time (or yours) trying to receive an injection of capital for growth solely for the sake of having more cash to fuel your business’s runway. Too many businesses — even smaller breweries and distilleries — land themselves in hot water this way. Don’t become one of them.

Showing What Investors Want to See in Your Business

  Before any investor, fund, or firm will agree to make an investment of growth capital in your business, they are going to scrutinize your business from every perceivable angle. Throughout their vetting process, you can (and should) expect any potential investor to analyze no less than the following aspects of your company:

●   Business Model: How does your brewery or distillery make money? What are your key business metrics such as revenue and gross margin, operating profit, and EBITDA? Is your current model scalable or does it need to be reworked if your business wishes to continue growing?

●   The Team: Does your business’s core team (including you) possess the knowledge, skills, and ability to carry the company through periods of growth? If not, which employee(s) need to be let go and replaced? Is the team able to collectively address and resolve issues?

●   Structure and Governance: How is your company structured and led? Is there transparency and accountability across its departments? Does your business have a succession and/or key man insurance plan in place? If so, what does it look like?

●   Exit Plan: Does your company have an exit strategy in place? If not, then why not? If so, what does this plan look like, and is it reasonably sound?

  All of these factors will play a vital role in your business’s ability to land growth capital. From my own experience as an investor/financier, I am looking for specific reasons not to invest in or finance a company; anyone can fall in love with thier own deals and each deal must stand on its own merits. This means that you, as the founder or owner of your business, will need to know both your company and its market viability inside and out if you wish to gain an investment of capital necessary to grow it in a way that meets your goals.

  If you are able to show investors and financiers that you are credible and trustworthy, that your business has shown the capacity to make sales of quality products and grow from its revenue and profits to date, and that it has the potential to continue growing in its existing market or into new markets, then your chances of landing an investment of capital required for growth are much higher.

Assessing the State of Craft and Specialty Beer Distribution Post-Covid

By: Becky Garrison

man carrying stack of beer on his shoulder

According to the Brewers Association, overall U.S. beer volume sales were down 3% in 2020, while craft brewer volume sales declined 9%, lowering small and independent brewers’ share of the U.S. beer market by volume to 12.3%. Retail dollar sales of craft decreased 22% to $22.2 billion and now account for just under 24% of the $94 billion U.S. beer market (previously $116 billion).

  According to their analysis, the primary reason for this overall sales decline was the shift in beer volume from bars and restaurants to packaged sales. Given this shift, how did craft beer distribution change during this ongoing global pandemic?

Half Time Beverage

  Half Time Beverage features over 4,000 craft beers and ciders from over 800 breweries across 50 countries. They sell via two New York based retail stores and their online business, a convenience that helped them during the worst of the pandemic.

  “The fact that we were able to deliver the best in craft beer to people’s doorsteps result-ed in an increased amount of purchases from both existing and new customers who ordered from Half Time during Covid,” said Jason Daniels, Half Time Beverage’s Chief Operating Officer.

  During Covid, Half Time had less availability in terms of seasonal releases such as Pumpkin Beer. “We had a lot of challenges in getting seasonal products this year as craft beer manufacturers are focused on making and distributing their core product releases,” Daniels said.

  Moving forward, Daniels does not foresee any changes to their marketing strategies, adding that Covid changed buying behaviors, specifically with a significant increase in online shopping. “We anticipate this will continue as things open up. The high availability of online goods and shopping amplified everyone’s ability to shop in different ways successfully.”

Tavour

  Tavour, a Seattle-based craft beer distributor, gets its beers directly from craft breweries. Once these products arrive at their facility in Washington State, they market and ship them to their members across the United States.

  During Covid, they implemented major safety modifications, including creating social distancing measures and increased sanitation for workers and the beers they distribute.

  Throughout the pandemic, Tavour ended up increasing its sales threefold. They attribute this growth to their SEO status increasing significantly, leading the company to be listed in the top five searches for craft beer delivery.

  They also observed that since people could not attend breweries or beer festivals in person, they were looking for new ways to try craft beer. Tavour filled this need with accurate tasting notes for all their offerings, capitalizing on their bevy of product samples and quality taste testers. These notes enabled their customers to have a better idea of what they were buying, even though they could not sample the beers themselves.

  While Tavour does not have any firm dates regarding when in-person events can happen again, they hope to resume them in 2022. Currently, they are working to help put on the Barrel and Flow Festival, a Pittsburgh-based celebration of black arts and artists.

Localized Craft Beer Distribution

  As the owner and sole proprietor of Packmule Beverage, Brian Balland buys from breweries that self distribute in Washington State and Oregon and then sells these beers directly to consumers. He delivers the orders to select breweries throughout Washington State, where customers can then go pick them up.

  He developed this niche, direct-to-consumer service for Pacific Northwest craft beer aficionados who want to sample beers from smaller breweries that only have these offerings available at their brewery but are too remote for them to visit on a regular basis. 

  Initially, Balland began this service by working with brewers within his circle. Later he expanded to include requests from customers for specific breweries.

  While he launched Packmule in September 2020, Balland conceived of this service pre-Covid. However, he said, “Covid made it easier to try new things and made consumers a little more malleable to trying new ideas rather than doing things the old way.”

  Since launching this service, Balland estimated he has pivoted twenty times, trying to figure out what will work best for the consumer. Moving forward, Balland plans to con-tinue offering Packmule’s services for consumers in the Seattle and Portland area.

DIY Beer Distribution

  Given that both owners of StormBreaker Brewing in Portland, Oregon, have experience working for a distributor or a logistics company, they chose to apply these skills in assessing how to distribute their award-winning craft beer during the global pandemic. After researching the cost benefits of various distribution models, they concluded that a self-distribution model worked best for them. So, they launched their self delivery ser-vice on March 17, 2020, right after Oregon issued a stay-at-home order, forcing bars and restaurants to close statewide.

  StormBreaker already had an active website for customers to order their beer and mer-chandise online, so they did not incur many logistical issues when launching their delivery service. They set up the ordering platform, and within days they were delivering to customers’ homes and establishments that remained open.

  According to co-founder Dan Malech, “The biggest advantage we have is complete con-trol of our product from inception to delivery. We have an amazing range of flexibility of what we sell, where we sell and when we sell.”

  This DIY model allowed them to deliver beer to their customers with very little notice. Malech cites an example where, during a bad snow and ice storm, the brewpubs around town that remained open were running out of beer. No one else was delivering.

  “We received a ton of calls, hopped in our vehicles, and made many new and lasting customers. I mean, we’re called StormBreaker!”

  While StormBreaker’s beers can be found in retail and grocery stores such as Whole Foods, New Seasons, Market of Choice and most regional bottle shops, some retailers won’t work with them. Also, they cannot approach certain parts of the United States without a distributor.

  “There were too many advantages to self distribution for a company of our size to ig-nore,” Malech said.

  Currently, Stormbreaker has dedicated staff to fulfill and deliver their online orders Mondays through Saturdays. They offer home delivery to the Greater Portland area, with their sales team doing periodic drops to Bend, Oregon and Seattle, Washington. Also, they can ship beers via UPS to those states that permit online sales. For all other out-of-state and greater Oregon sales, they partner with Bevv, Packmule, Drizzly and Tavour, which allows them to have a larger reach both regionally and throughout the country.

Merchant du Vin: Specialty Beer Importer

  Seattle based Merchant du Vin noticed that the distribution of their specialty beers increased in retail stores due to more consumers drinking beers at home during the pandemic, causing their overall sales to increase.

  On the other hand, bar and restaurants sales decreased when these establishments were closed due to Covid-19 restrictions. For example, Orval Trappist Ale is one of the most popular imported specialty beers Merchant du Vin represents in the U.S. While this beer is available in select stores, the bulk of its sales come from bars and restaurants that carry a small but carefully curated craft beer list.

  In addition, with the closing of on premise sales, there were huge losses of keg sales across the U.S. According to Craig Hartinger, Merchant du Vin’s marketing manager, “We actually fared better than some suppliers, but there were hundreds of kegs that we couldn’t sell.”

  Merchant du Vin also lost their ability for their beer representatives to present beers in person to potential outlets, as well as opportunities for in-person consumer tastings. “It took a while to get our online meetings up to speed,” Hartinger said.

  When regions open up, Merchant du Vin plans on continuing their online connections, resuming in person visits and reducing their keg options. Once events can be held in-person, they plan on exhibiting their wares as applicable, such as their Samuel Smith ciders, which they featured at Seattle Ciderfest pre-Covid.

Types of New Software & Technology in the Beverage Industry

By: Alyssa L. Ochs

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Everything is going high-tech these days, and the craft beverage industry is no exception. If you work in this industry, staying updated on the newest technology will help you make smart decisions for your business. Not all forms of technology make sense for every beverage business, but the benefits of familiarizing yourself with what’s on the market will pay off in the long term.

How Technology Can Improve Beverage Production

  Although the processes of making beer and spirits haven’t changed much over the years, many smart technology options are available to help with everything from product-tracking to label-making to helping consumers connect with brands interactively. Whether you’re looking for help with beverage planning, supply purchasing, production assistance or quality control, there’s likely a tech-savvy solution.

  In the front of the house, technology makes it possible for customers to order drinks via touchscreen rather than through a human server. Behind the scenes, it allows tracking and data management for traceability and knowing what’s in demand. Breweries and distilleries may be interested in learning how to print 3D materials, such as creative artwork for glasses. Blockchain technology can improve trackability across the supply chain and assist producers in better adhering to regulations. Many companies use software platforms to ensure they meet compliance standards.

  Many breweries and distilleries would benefit from upgrading their data management systems to eliminate time-consuming and error-prone spreadsheets. A sound data management system can help producers with sales, distribution, production metrics and demand analytics to better understand what and when to order. Cloud-based software is often preferred by breweries and distilleries because the data can be accessed from anywhere, regularly updated by a vendor and maintained by a professional IT team. Pieces of technology should work together with existing task management apps, such as Trello, and communication apps, like Slack, that your team uses.

  Another use of technology in the industry involves mobile apps to integrate different data points, such as diagnostics, GPS, electronic logs and temperature controls. Artificial intelligence data can develop new flavors based on predictions of what consumers want. AI is also being used to improve quality control through the use of sensors and cameras.

In today’s era of staffing shortages, technology can be utilized to train staff, retain the workforce and recruit new talent when resources are strained. Beverage-makers may also use technology to expand where they sell products to lessen their dependence on traditional distribution channels.

Technology Spotlight: Refractometers

  Based in Solon, Ohio, MISCO designs and commercializes digital handheld and inline process refractometers for industries requiring quantitative determination of fluid concentration and quality. MISCO has been in the refractometer field for four decades and is the only U.S. manufacturer of digital handheld refractometers. It is actively developing new technologies to bring even greater usefulness of refractometry to its markets.

  Mark Keck, Chief Commercial Officer for MISCO, told Beverage Master Magazine that MISCO digital handheld units are ideal for generating immediate results anywhere in the operation. He said they can be programmed with up to five measurement scales from an extensive scale library to provide customers with a device tailored to their exact testing requirements.

  “This feature is especially useful for operations that produce a range of products, eliminating the need for multiple units with a single readout capability,” Keck said.

  Meanwhile, inline process refractometers are best for larger operations and give continuous readings that can be output to any data capture system.

  “For breweries, MISCO has developed a set of measurement scales that were scientifically derived from a complex sugar profile specific to wort,” Keck said. “Other refractometers base their readings on sucrose, which is why using a correction factor is required when using these units. MISCO Pro-Brewing Scales account for the wort’s complex sugar profile, which includes maltose, maltotriose, dextrose, fructose, sucrose and other materials, eliminating the need for correction factors and providing more accurate results.”

  Recently, there have been advances and innovations in refractometry that breweries and distilleries may find helpful.

  “Because every operation has unique testing requirements, MISCO has developed a build-your-own tool on its website to allow customers to easily design and order digital handheld refractometers with programming they select from our large measurement scale library,” said Keck. “In addition, we are developing new refractometers that utilize technologies that are part of the Industry 4.0 paradigm for improvements in operations, automation and communication.”

  Even when beverage-related technology looks and sounds intriguing and exciting on the surface, there is little benefit to trying it just for the sake of novelty. Keck told Beverage Master Magazine that “spyglass-style” analog refractometers are still commonly used in the industry, but these devices have numerous limitations compared to digital units, such as reading subjectivity, precision and durability.

  “When upgrading to a digital refractometer, or even considering a different digital unit, customers would want a unit that is easy to use, employs quality materials, is durable, has automatic temperature compensation, is easy to calibrate and provides readings that match the fluid testing requirements of the operation,” Keck said. “Lastly, product support should also be considered – where the unit would be serviced for routine maintenance and calibration certification.”

  Whether refractometers or any other technology, learn about the products and choose those that set themselves apart from the competition. Depending on the device, this could be related to durability, level of precision or ease of use.

  “Our optics utilize sapphire prisms for high precision, improved temperature equilibration and durability,” Keck said. “Signal detection is achieved with high-definition detectors that provide up to eight times the resolution of other handheld units. Lastly, our commitment to Lean Manufacturing principles and adoption of ISO guidelines ensures that the quality of our products is second to none.”

Benefits of Trying New Software and Technology

  Even with practical considerations in mind, producers benefit from having a forward-thinking approach to brewing and distilling and an open-mindedness about technology solutions that may help your business. Technology can help you be more flexible with production, consume less energy for an eco-friendly operation and make the quality of beer and spirits better.

  Certain pieces of software and technology help integrate functions and manage assets more efficiently, optimize production lines for greater control over processes and attract the attention of tech-savvy consumers. When used correctly, technology can help breweries and distilleries be competitive in an oversaturated market. A good technology solution exists for every brewer and distiller, whether that involves on-premise software, cloud-based software, mobile applications or specialized devices, such as refractometers.

Choosing the Right Tech Upgrades for Your Business

  It’s not always practical to take on multiple types of new technology simultaneously, but a few innovations are worth looking into further. For example, there are some excellent platforms for brewery and distillery management software, and food-ordering software for establishments serving food and drinks. Online restaurant POS systems accept instant payments and provide food traceability solutions for inventory and beverage distribution management solutions. Beverage warehouse and logistics management systems, as well as “Internet of Things” solutions to keep track of food safety recalls and shelf-life management, can be addressed with the latest and greatest technology available to the industry.

  “Tools are available or in development that can impact productivity, improve product quality and consistency and result in greater operational efficiency,” said Keck. “MISCO is integrating many of these technologies into our refractometer to allow our customers to do what they do better.”

Sustainability in Craft Brewing:

A Journey Without An End

By: Gerald Dlubala

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Environmental stewardship and sustainability are a top priority for craft breweries. It needs to be in their business plan because climate change affects every facet of the brewing from the agricultural side through the actual brewing process. A balance between workable stewardship and attainable sustainability practices ensures a quality craft brewing future. The Brewer’s Association is a not-for-profit trade organization of brewers for brewers and by brewers that make it a point to help small and independent brewers reach these goals by offering benchmarking tools and sustainability manuals that encourage and promote these practices.

  Chuck Skypeck, Technical Brewing Projects Manager at the Brewers Association, told Beverage Master Magazine that conscientious brewing practices ensure the long-term success of the craft beer brewing process and the communities they call home.

  “According to business models, there are upwards of 8,500 craft brewers in the United States, with a third of them making a substantial part of their profit through foodservice,” said Skypeck. “Their outlook on the meaning of sustainability and what they want to focus on is different from others that don’t revolve around food service. Regionality also influences a brewpub’s focus, with Western based brewers looking more towards water conservation and Eastern-based counterparts more concerned over energy conservation.”

  But where do you start? What type of benchmarking tools do you need? “That depends on what category you want to focus on,” said Skypeck. “When you break it down to basics, brewing is no different from any manufacturing business. It’s okay to start small and make incremental changes when possible and practical. For example, smaller brewers will not look at solar energy due to the length of time they’d have to wait for the payback. Still, they can certainly make smaller changes such as LED lighting and newer, energy-efficient equipment. And let’s face it, sustainability is truly a journey without an end. Still, any size brewer can be a good community partner and interactive participant in community programs such as clean water campaigns. Of course, even the largest craft brewers are small compared to the big, mainstream national breweries. However, as demonstrated by the Sierra Nevada and New Belgium breweries, possibilities exist for craft brewers, both currently operating using facilities based on sustainability practices, including landscaping and wastewater applications.”

  The Brewers Association offers manuals to help guide producers through various focus areas, including energy, solid waste, sustainable build and design strategies, water and wastewater management.

  Climate change affects everything brewing-related, building the need for sustainability within the industry. Barley has been drought-impacted, with warmer temperatures and irregular, late-season rains, causing early sprouting and more crops to be unusable for brewing, rendering them fit only as livestock feed. Hops have fallen victim to wildfires (smoke taint) and drought, leading to decreased resistance to pests. Then there’s water supply issues, hurricane devastation to specialty citrus ingredients, and CO2 shortages, exacerbated by extreme cold that affects compressors and natural gas supplies.

  “Many brewers talk about using only locally grown ingredients,” said Skypeck. “That sounds good, but many times it’s hard to pull off in the long run. Ingredients like barley have optimal conditions to thrive and are best grown where the climate conditions match that. Ninety-five percent of hops are grown in the Pacific Northwest because of the preferred climate conditions. That type of growing infrastructure is important but expensive to develop and perfect. Other non-optimal areas will naturally have trouble competing not only in quality but the price, and some local level producers can’t produce enough high-quality yield over time consistently. We’re trying to help with that. While the pandemic put a hold on our annual conference, we were still able to move forward with funded research to encourage and facilitate economic, agricultural practices. These included developing barley with longer root masses to use less water for both irrigation purposes and in drought conditions, as well as ways to minimize the need for fertilizer.”

  Skypeck told Beverage Master Magazine that he has seen a trend in the idea of CO2 capture within the brewing industry. The CO2 produced by craft breweries is roughly between 10-20% of the brewery’s carbon footprint. That seems like a small amount, but it’s an economical and sensible way to build sustainability with notable returns on investment when efficiently captured. In addition, smaller capturing units are now more feasible for microbreweries because of the rising purchase cost due to the ongoing supply shortage.

Carbon Capture Is Within Reach

For Craft Brewers

  Earthly Labs is the leader in small-scale carbon capture, with more small-scale systems deployed than anyone globally. Their plug-and-play units are specifically designed for brewery environments and handle variable gas flow rates, allowing capture from different sized vessels and brite tanks.

  Amy George, Founder and CEO of Earthly Labs, operates under the assumption that people will help protect our climate and planet given the right useful and affordable tools.

  “We are constantly innovating on our platform to increase the benefits to the brewer,” said George. “CO2 capture has long been a benefit for large-scale brewers and industrial players, but our system gives most breweries that same opportunity to avoid waste and produce a better product while also helping the environment. Operationally, most brewers larger than 1,000 barrels can now implement and maintain a CO2 capture system. Historically, the economic feasibility of a system used to be governed by the purchase price of CO2. For example, a brewery with an annual production of 5,000 barrels paying one dollar per pound for CO2 supply would receive a faster payback than a brewery producing 20,000 barrels paying ten cents a pound. However, post-Covid, that supply chain is now challenged with volatile pricing and reduced availability. The risk of not being able to make your beer due to CO2 shortages puts pressure on ways to capture your waste gas to use in your beer-making process.”

  George said that carbon capture helps avert shortages, provides cleaner CO2 for use, reduces purchases and ultimately makes products better. The Earthly Labs carbon capture CiCi system is designed for craft brewer or beverage manufacturers with an annual production rate of 5,000 barrels or more. Additional designs for breweries with annual production rates of 1,000 barrels up to those that top the 20,000 barrel mark are in the works. The CiCi system uses a three-step gas purification system that dries, scrubs and liquifies the captured gas to remove unwanted acid gases, aromas, moisture, oxygen and volatile organic compounds. This process ultimately provides a clean product that can potentially help brew a tastier beer.

  “Additional benefits include more certainty of supply while reducing costs caused by delivery fees, surcharges and price volatility,” said George. “Your brewery will reduce CO2 emissions, improving safety while enhancing your brand image by offering a more sustainably brewed product. Looking at cost-benefit alone, most breweries recover their investment within two to three years. That can be far less looking at resulting sales gains based on a better-quality product and marketing that product on a sustainable level. The expected time to recover your investment cost is directly affected by your current cost of CO2, how much you’re using, and the expected volatility of your supply. For example, if you currently can’t brew your beer due to CO2 shortages, then you can recoup your investment in a matter of months.”

  George told Beverage Master Magazine that while some claims are not part of their guaranteed results, brewers currently using Earthly Labs units report additional quality benefits, including better mouth feel and aroma, head retention and lacing. There are also reports of lower dissolved oxygen in the finished product.

  “The natural CO2 that brewers create and then capture comes from the brewer’s ingredients versus hydrocarbon sources, so the resulting CO2 waste gas doesn’t include many of the volatile organic compounds or hydrocarbons found in commercially available CO2 gas,” said George. “As a result, there is statistically less oxygen in the gas, often well below the allowable beverage grade limit. We like to say that this captured CO2 is the fifth ingredient in great tasting beer.”

  The CiCi system captures the waste CO2 vented from a blow-off arm. A stainless-steel drum called a foam trap replaces the blow-off bucket, designed to seal the gas and push it via flex tubing to the carbon capture system, purifying the gas through a three-step process. First, the CO2 is dried to remove water and oxygen, then scrubbed to remove the VOCs and other impurities down to the parts per million or parts per billion levels. After that, the gas is converted to a liquid at -34.7 degrees Celsius, sterilizing the gas allowing more accessible storage. Finally, the liquid is stored in a CO2 tank and usually connected to a vaporizer for integration into the brewery manifold, facilitating use in carbonation, packaging and purging.

  Earthly Labs provides field training through the installation, including equipment operation, troubleshooting, safety, cleaning and general maintenance. The design of the CiCi system makes it easy to use while it runs in the background, allowing the brewer to concentrate on making their beer. Essential maintenance, including weekly cleaning and monthly filter changes, can be done by brewery personnel. The system is also connected to a cloud-based dashboard so Earthly Labs can remotely troubleshoot to resolve the issue or dispatch field personnel to service the unit if necessary.

Packaging for a Sustainable Future

  “Packaging choice is another option to increase sustainability in your brewery, but like ingredients, you should consider the quality, availability and other hidden costs of your choice. There is always a tradeoff when considering suppliers, whether local or national,” said Skypeck. “The brewer has to consider the cost of transportation, how far the packaging materials are traveling and the actual shipping costs for their packaging choices. If you want to use recyclable containers, know the recycling rates for that packaging choice, as well as the recycling rates for your community. There is a current bill in Congress, [The CLEAN Future Act], addressing the returnability of bottles for the entire beverage industry. But will you get people like those in Flint, Michigan, to pay more for [non-carbonated*] returnables and recyclables when they can only use bottled water? There are pros and cons to every decision, so true sustainability is a process for continuous improvement, not necessarily a result.”

  One example of a 100% plastic-free, fully renewable, recyclable and biodegradable packaging solution is the TopClip system from Smurfit Kappa. Maria Berdugo, Smurfit Kappa’s Innovation & Development Manager, told Beverage Master Magazine that sustainability is in the company’s DNA and is the core of their business.

  “To us, sustainability in the beverage market means the reduction of waste going into landfills, the reduction of CO2 emissions and the responsibility in using recyclable raw materials when available,” she said. “We offer our TopClip cardboard solutions for packaging in 12 and 16 ounce cans packaged in a four, six or eight-can pack. TopClip is a Forest Stewardship Council certified, paper-based packaging option. It offers protection from contamination with complete coverage of the can lid and customized, easy-to-see branding opportunities. Additionally, the TopClip offers a more than 30% carbon footprint reduction over alternatives like shrink film.”

  The downside for craft brewers may be that TopClip does require specialized application machines. However, Berdugo said, multiple machine systems are available depending on canning line speeds and individual brewery’s packaging needs. Smurfit Kappa works with the beverage producer to identify the most efficient and best packaging solution.

  “TopClip is an ideal solution for companies that are purpose-driven to invest in sustainable solutions and avoiding landfill waste,” said Berdugo.

The Potential For Tax Credits Is Out There

  “We at the Brewers Association provide nationwide help,” said Skypeck. “There are 50 state brewer’s guilds for craft brewers to turn to for the local support they need, including sustainability guidelines. Along with developing resources and providing safety, sustainability, and quality development tools, we advocate for craft brewing on the federal level, helping to get reductions in federal taxes and working with federal trade bureaus and OSHA regulators. Alcohol law is based on state-level regulations, so the individual states guide breweries on navigating those laws. But we know that there are tax credits associated with CO2 capture for large breweries. We are working diligently to get those same credits available to all of our smaller craft producers.”

* In current Michigan law, residents pay a 10 cent deposit on all carbonated beverages. The CLEAN Future Act proposes a national U.S. law that would require a 10 cent deposit on all carbonated and uncarbonated drinks in glass, plastic and metal beverage containers with the exception of infant formula, liquid drugs and meal and caloric replacements.